Sherpa Outfitters sells specialty equipment for mountain climbers.Its sales for last year included $488,500 of tents and $ 800,000 of climbing gear.For next year, management has decided to sell specialty sleeping bags also.As a result of this change, sales projections for next year are $537,350 of tents, $880,000 of climbing gear, and $150,000 of sleeping bags.How much of next year's sales are derived from the side effects of adding the new product to its sales offerings?

Question

Quizplus · Accepted Answer

The side effects are the increase in sales of existing products due to the introduction of the new product. The increase in tent sales is $537,350 - $488,500 = $48,850, and the increase in climbing gear sales is $880,000 - $800,000 = $80,000. Therefore, the total side effects amount to $48,850 + $80,000 = $128,850.

Sherpa Outfitters Sells Specialty Equipment for Mountain Climbers