Extreme Adventure Gear manufactures and sells 9 different models of adventure gear. Extreme Adventure Gear is...
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Extreme Adventure Gear manufactures and sells 9 different models of adventure gear. Extreme Adventure Gear is contemplating a 4% price cut across all 9 models. It expects the price cut to result in a 10% increase in the number of units sold for models L1201, L1203, L1205, and L1207. The other five models (L1202, L1204, L1206, L1208, and L1209) are expected to see a 6% increase in sales volume. Assess the impact of the price cut on Extreme Adventure Gear’s profits and prepare a balance sheet.
Model | Sales Price | Variable Costs | Sales Volume |
L1201 | $80 | $40 | 1,200 |
L1202 | $90 | $45 | 1,800 |
L1203 | $100 | $50 | 2,400 |
L1204 | $110 | $55 | 3,000 |
L1205 | $120 | $60 | 3,600 |
L1206 | $130 | $65 | 4,200 |
L1207 | $140 | $70 | 4,800 |
L1208 | $150 | $75 | 5,400 |
L1209 | $160 | $80 | 6,000 |
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