Summit Gear manufactures and sells 6 different models of outdoor gear. Summit Gear is contemplating...
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Summit Gear manufactures and sells 6 different models of outdoor gear. Summit Gear is contemplating a 4% price cut for all models. It expects the price cut to result in an 8% increase in units sold for models EE3101, EE3103, and EE3105. The other three models (EE3102, EE3104, and EE3106) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Summit Gear’s profits and prepare the equity statement.
•Model: EE3101
oSales Price: $85
oVariable Costs: $40
oSales Volume: 2,000
•Model: EE3102
oSales Price: $95
oVariable Costs: $45
oSales Volume: 2,500
•Model: EE3103
oSales Price: $105
oVariable Costs: $50
oSales Volume: 3,000
•Model: EE3104
oSales Price: $115
oVariable Costs: $55
oSales Volume: 3,500
•Model: EE3105
oSales Price: $125
oVariable Costs: $60
oSales Volume: 4,000
•Model: EE3106
oSales Price: $135
oVariable Costs: $65
oSales Volume: 4,500
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