Hiker's Choice manufactures and sells 11 different models of hiking gear. Hiker's Choice is contemplating a...
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Hiker's Choice manufactures and sells 11 different models of hiking gear. Hiker's Choice is contemplating a 5% price cut across all 11 models. It expects the price cut to result in a 9% increase in the number of units sold for models X2401, X2403, X2405, and X2407. The other seven models (X2402, X2404, X2406, X2408, X2409, X2410, and X2411) are expected to see a 6% increase in sales volume. Assess the impact of the price cut on Hiker's Choice’s profits and prepare a profit and loss statement.
Model | Sales Price | Variable Costs | Sales Volume |
X2401 | $70 | $35 | 2,500 |
X2402 | $80 | $40 | 3,000 |
X2403 | $90 | $45 | 3,500 |
X2404 | $100 | $50 | 4,000 |
X2405 | $110 | $55 | 4,500 |
X2406 | $120 | $60 | 5,000 |
X2407 | $130 | $65 | 5,500 |
X2408 | $140 | $70 | 6,000 |
X2409 | $150 | $75 | 6,500 |
X2410 | $160 | $80 | 7,000 |
X2411 | $170 | $85 | 7,500 |
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