Question

You are upgrading to better production equipment for your​ firm's only product. The new equipment will allow you to make more of your product in the same amount of time.​ Thus, you forecast that total sales will increase next year by 16 % over the current amount of 102 comma 000 units. If your sales price is $ 19 per​ unit, what are the incremental revenues next year from the​ upgrade?

Answer 1

Answer:

$310,080

Explanation:

Incremental revenue refers to the additional revenue generated by a certain project or activity. In this case, your sales should increase by 16% from 102,000 units to 118,320 units. Total revenue will increase from $1,938,000 (= 102,000 x $19) to $2,248,080 (= 118,320 x $19).

The incremental revenue = $2,248,080 - $1,938,000 = $310,080