Speedy Cycles manufactures and sells 10 different models of racing bicycles. Speedy Cycles is contemplating a...
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Speedy Cycles manufactures and sells 10 different models of racing bicycles. Speedy Cycles is contemplating a 7% price cut across all 10 models. It expects the price cut to result in a 10% increase in the number of units sold for models H801, H803, H805, and H807. The other six models (H802, H804, H806, H808, H809, and H810) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Speedy Cycles’ profits and prepare a sales revenue report.
Model | Sales Price | Variable Costs | Sales Volume |
H801 | $85 | $40 | 1,800 |
H802 | $95 | $45 | 2,500 |
H803 | $105 | $50 | 3,000 |
H804 | $115 | $55 | 3,500 |
H805 | $125 | $60 | 4,000 |
H806 | $135 | $65 | 4,500 |
H807 | $145 | $70 | 2,200 |
H808 | $155 | $75 | 1,800 |
H809 | $165 | $80 | 1,500 |
H810 | $175 | $85 | 1,200 |
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