Cooler Rooms Ltd manufactures airconditioning units designed for apartment use. The company markets this line in two
Question:
Cooler Rooms Ltd manufactures airconditioning units designed for apartment use. The company markets this line in two geographic areas, one with a humid climate and the other with a dry climate. Approximately 60% of all new apartment blocks in the two areas will have an individual airconditioner installed in each apartment. It has also projected that 5% of the existing apartments will install new individual airconditioners to improve existing systems or replace old ones that cannot be repaired. Based on past experience, Cooler Rooms Ltd expects to capture 30% of the new apartment block construction market and 10% of the replacement market.
The company sells two models of air conditioners — the standard and the deluxe, a more energy-efficient unit. Builders will use the standard model in 60% of the apartments they construct and the deluxe model in 40%. When an existing block installs new air conditioners, it will use the standard model in 55% of the apartments and the deluxe model in 45%.
The other information available is:
Humid climate | Dry climate | ||||||
Number of apartments to be constructed Number of existing apartments Selling price — standard Selling price — deluxe | 4200 50000 $1250 $1630 | 5100 40000 $850 $1200 | |||||
Required
Prepare a sales forecast for Cooler Rooms Ltd by market area.
Step by Step Answer:
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett