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Hill Motor Homes Currently Sells 1,160 Class a Motor Homes,2,170

Question 51

Multiple Choice

Hill Motor Homes currently sells 1,160 Class A motor homes,2,170 Class C motor homes,and 1,600 pop-up trailers each year.It is considering adding a midrange camper and expects that if it does so the firm can sell 800 of them.However,if the new camper is added,the firm expects its Class A sales to decline by 8 percent while the Class C camper sales decline to 1,950 units.The sales of pop-ups will not be affected.Class A motor homes sell for an average of $179,000 each.Class C homes are priced at $64,500,and the pop-ups sell for $5,700 each.The new midrange camper will sell for $26,900.What is the erosion cost of the new camper?


A) $38,323,800
B) $30,801,200
C) $49,350,000
D) $1,478,800
E) $2,118,600

Correct Answer:

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