EcoSport manufactures and sells 8 different models of eco-friendly sports gear. EcoSport is contemplating a 5%...
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EcoSport manufactures and sells 8 different models of eco-friendly sports gear. EcoSport is contemplating a 5% price cut across all 8 models. It expects the price cut to result in an 8% increase in the number of units sold for models V2201, V2203, V2205, and V2207. The other four models (V2202, V2204, V2206, and V2208) are expected to see a 4% increase in sales volume. Assess the impact of the price cut on EcoSport’s profits and prepare a balance sheet.
Model | Sales Price | Variable Costs | Sales Volume |
V2201 | $95 | $45 | 1,500 |
V2202 | $105 | $50 | 2,000 |
V2203 | $115 | $55 | 2,500 |
V2204 | $125 | $60 | 3,000 |
V2205 | $135 | $65 | 3,500 |
V2206 | $145 | $70 | 4,000 |
V2207 | $155 | $75 | 4,500 |
V2208 | $165 | $80 | 5,000 |
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