Peak Performance manufactures and sells 11 different models of athletic wear. Peak Performance is contemplating a...
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Peak Performance manufactures and sells 11 different models of athletic wear. Peak Performance is contemplating a 5% price cut across the board for all 11 models. It expects the price cut to result in an 8% increase in the number of units sold for models K1101, K1103, K1105, and K1107. The other seven models (K1102, K1104, K1106, K1108, K1109, K1110, and K1111) are expected to see a 4% increase in sales volume. Assess the impact of the price cut on Peak Performance’s profits.
Model | Sales Price | Variable Costs | Sales Volume |
K1101 | $70 | $35 | 1,000 |
K1102 | $80 | $40 | 1,500 |
K1103 | $90 | $45 | 2,000 |
K1104 | $100 | $50 | 2,500 |
K1105 | $110 | $55 | 3,000 |
K1106 | $120 | $60 | 3,500 |
K1107 | $130 | $65 | 4,000 |
K1108 | $140 | $70 | 4,500 |
K1109 | $150 | $75 | 5,000 |
K1110 | $160 | $80 | 5,500 |
K1111 | $170 | $85 | 6,000 |
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