Adventure Gear Co. manufactures and sells 6 different models of adventure gear. Adventure Gear is contemplating...
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Adventure Gear Co. manufactures and sells 6 different models of adventure gear. Adventure Gear is contemplating a 4% price cut for all models. It expects the price cut to result in a 7% increase in units sold for models J1001, J1003, and J1005. The other three models (J1002, J1004, and J1006) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Adventure Gear’s profits and prepare the equity statement.
Model | Sales Price | Variable Costs | Sales Volume |
J1001 | $125 | $60 | 2,000 |
J1002 | $135 | $65 | 3,000 |
J1003 | $145 | $70 | 4,000 |
J1004 | $155 | $75 | 2,500 |
J1005 | $165 | $80 | 2,200 |
J1006 | $175 | $85 | 1,800 |
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