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Problem:

Winnebagel Corp. currently sells 36,000 motor homes per year at $74,000 each, and 15,000 luxury motor coaches per year at $111,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 31,000 of these campers per year at $17,000 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 2,400 units per year, and reduce the sales of its motor coaches by 1,100 units per year.

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Question: What is the amount to use as the annual sales figure when evaluating this project?

Note: Please explain comprehensively and give step by step solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91166352

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