Winn Corp. currently sells 9,820 motor homes per year at $45,500 each, and 3,680 luxury motor coaches per year at $89,700 each.

Question

1 month ago

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Winn Corp. currently sells 9,820 motor homes per year at $45,500 each, and 3,680 luxury motor coaches per year at $89,700 each.

The company wants to introduce a new portable camper to fill out its product line. It hopes to sell 3,758 of these campers per year at $14,750 each. An independent consultant has determined that if the new campers are introduced, sales of its existing motor homes will most likely increase by 250 units per year while the sales of its luxury motor coaches will probably decline by 368 units per year. What is the incremental sales amount that should be used when evaluating the portable camper project?

Business

2 answers:

harina [3.8K] · Answer 1 · 2026-04-02T16:12:18+03:00

Response::

$33,795,900

Rationale::

To determine sales from the new product line, ascertain the synergy from estimates provided by consultants and additionally account for any erosion.

1. Sales from the new product line = 3,758 campers at $14,750 each = $55,430,500

2. Synergy = 250 units at $45,500 each = $11,375,000 growth in sales

3. Erosion = 368 units each at $89,700 = $33,009,600 loss in sales

Thus, incremental sales are calculated as follows:

Net Sales = Sales from new line + Synergy - Erosion

Final incremental sales = 55,430,500 + 11,375,000 - 33,009,600 =

$33,795,900

harina [3.8K] · Answer 2 · 2026-04-02T16:14:33+03:00

Response:

the incremental sales will amount to $33,795,900

Rationale:

Sales revenue from 3,758 units at $14,750 each totals to 55,430,500

Revenue lost on luxury motor coaches:

368 units at $89,700 equals a decline of 33,009,600‬

Added revenue from motor homes:

250 units at $45,500 yields 11,375,000‬

Net effect:

55,430,500 + 11,375,000 - 33,009,600 equates to 33,795,900