Sales forecast is based on projected levels of demand

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Reference no: EM132066376

The sales forecast is based on projected levels of demand. All the numbers are expressed in today’s dollars.

Price per bus $220,000

Units sold per year 12,250

Labor cost per bus $32,500

Components & Parts $86,500

Selling General & Administrative $200,000,000

The average warranty cost per year per bus for the first five years is $2,000. The present value of this cost will be used as a cost figure for each bus. Afterwards, the bus operator will become responsible the repairs on the buses. The buses can be produced for 15 years. Afterwards, the designs become obsolete.

Reference no: EM132066376

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