posted by William .
Winnebagel Corp. currently sells 33,000 motor homes per year at $49,500 each, and 13,200 luxury motor coaches per year at $93,500 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 23,100 of these campers per year at $13,200 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 5,500 units per year, and reduce the sales of its motor coaches by 1,430 units per year. The amount to use as the annual sales figure when evaluating this project is
you would calculate as follows:
Only the income that results from this project is going to be counted.
So, all "currently sells X at $" info is ignored!
23100 x $13200
+ 5500 x $49500
+ -1430 x $93500 (we sell less of these)