Lee's currently sells 13,800 motor homes per year at $87,900 each, and 1,100 luxury motor coaches per year at $139,900 each.The company wants to introduce a low-range camper to fill out its product line; it hopes to sell 7,200 of these campers per year at $17,500 each.An independent consultant has determined that if the company introduces the new campers, it should boost the sales of its existing motor homes by 1,100 units per year, and reduce the sales of its luxury motor coaches by 610 units per year.What amount should be used as the annual sales figure when evaluating this project?

Question

Quizplus · Accepted Answer

The annual sales figure should include the sales from all products after the introduction of the new camper. This includes the original sales of motor homes and luxury motor coaches, adjusted for the changes in sales due to the new camper, plus the sales from the new camper itself.

Lee's Currently Sells 13,800 Motor Homes Per Year at $87,900