Adventure Gear Co. manufactures and sells 6 different models of adventure gear. Adventure Gear is contemplating...
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Accounting
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 T2001, T2003, and T2005. The other three models (T2002, T2004, and T2006) 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
T2001
$125
$60
2,000
T2002
$135
$65
3,000
T2003
$145
$70
4,000
T2004
$155
$75
2,500
T2005
$165
$80
2,200
T2006
$175
$85
1,800
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