Green Woods sells specialty equipment for mountain climbers.Its sales for last year included $387,000 of tents and $718,000 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 $411,000 of tents,$806,000 of climbing gear,and $128,000 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 of adding the new product are the changes in sales of existing products. The increase in tent sales is $411,000 - $387,000 = $24,000, and the increase in climbing gear sales is $806,000 - $718,000 = $88,000. The total side effect is $24,000 + $88,000 = $112,000.

Green Woods Sells Specialty Equipment for Mountain Climbers