Sports Unlimited manufactures and sells 8 different models of sports equipment. Sports Unlimited is contemplating a...
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Sports Unlimited manufactures and sells 8 different models of sports equipment. Sports Unlimited 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 CC2901, CC2903, CC2905, and CC2907. The other four models (CC2902, CC2904, CC2906, and CC2908) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Sports Unlimited’s profits.
Model | Sales Price | Variable Costs | Sales Volume |
CC2901 | $70 | $35 | 1,800 |
CC2902 | $80 | $40 | 2,000 |
CC2903 | $90 | $45 | 2,500 |
CC2904 | $100 | $50 | 3,000 |
CC2905 | $110 | $55 | 3,500 |
CC2906 | $120 | $60 | 4,000 |
CC2907 | $130 | $65 | 4,500 |
CC2908 | $140 | $70 | 5,000 |
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