Winnebagel Corp. currently sells 29,700 motor homes per year at $81,500 each and 8,700 luxury motor coaches per year at $123,500 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 24,700 of these campers per year at $27,500 each. An independent consultant has determined that if the company introduces the new campers, it could boost the sales of its existing motor homes by 4,300 units per year and reduce the sales of its motor coaches by 1,020 units per year. What are the annual sales for the new portable camper

We first of calculate the total amount of sales which is due to the product line as a result of the new product line set at the product it hopes to sell which is twenty-four million, seven hundred and twenty-seven thousand five hundred dollars each. The result is $679, 250,000. Increased car sales equals $350,450,000. Sales decrease is put at $125,970,000. Thus, annual net sale for the new portable camper is put at $903,730,000.

Explanation:

We calculate the total number of sales which is due to the product line

Thus Sales= Camper units hope to sell*Cost per year of each

Sales= 2400*$27500= $679250000

We hence calculate the increased car sales recorded as a result of the new product line

Increased car sales observed = Boost per year* Cost per year

Increased car sales observed = 4300*$81500= $350450000

To calculate reduced sales of luxury motor coaches we hence say:

Reduced sales= Reduced sales unit per year* Cost of luxury motor coaches

Reduced sales= 1020*123500= $125970000

To calculate the annual sales for the new camper we hence say:

Annual sales = Sales+Increased car sales observed-Reduced sales

Annual sales= $679250000+$350450000-$125970000=$903730000.

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