Adventure Tech manufactures and sells 7 different models of adventure gear. Adventure Tech is contemplating a...
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Adventure Tech manufactures and sells 7 different models of adventure gear. Adventure Tech is contemplating a 6% price cut across all 7 models. It expects the price cut to result in a 10% increase in the number of units sold for models DD3001, DD3003, DD3005, and DD3007. The other three models (DD3002, DD3004, and DD3006) are expected to see a 6% increase in sales volume. Assess the impact of the price cut on Adventure Tech’s profits and prepare a balance sheet.
Model
Sales Price
Variable Costs
Sales Volume
DD3001
$75
$35
2,000
DD3002
$85
$40
2,500
DD3003
$95
$45
3,000
DD3004
$105
$50
3,500
DD3005
$115
$55
4,000
DD3006
$125
$60
4,500
DD3007
$135
$65
5,000
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