PLEASE CALCULATE BY HAND, NOT USING EXCEL AND SHOW WORK

Bobbys currently sells 110 Class A motor homes, 220 Class C motor homes and 280 pop-up trailers each year. Bobbys is considering adding a mid-range camper with expected annual sales of 300 units. However, if the new camper is added, then Class A sales are expected to decline to 85 units and Class C sales are expected to decline to 200 units; pop-up sales are not expected to change. Class A motor homes currently sell for $140,000 per unit; Class C motor homes are priced at $59,500 per unit, and the pop-up trailers sell for $5,000 per unit. The new mid-range camper will sell for $42,900. What is the annual erosion cost of adding the mid-range camper?

• $7,875,000

• $5,375,000

• $5,425,000

• $6,315,000