Trail Blazers manufactures and sells 7 different models of hiking equipment. Trail Blazers is contemplating a...
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Trail Blazers manufactures and sells 7 different models of hiking equipment. Trail Blazers is contemplating a 5% price cut across all 7 models. It expects the price cut to result in a 12% increase in the number of units sold for models N1401, N1403, and N1405. The other four models (N1402, N1404, N1406, and N1407) are expected to see a 6% increase in sales volume. Assess the impact of the price cut on Trail Blazers’ profits and prepare a profit and loss statement.
Model | Sales Price | Variable Costs | Sales Volume |
N1401 | $65 | $30 | 1,800 |
N1402 | $75 | $35 | 2,200 |
N1403 | $85 | $40 | 2,600 |
N1404 | $95 | $45 | 3,000 |
N1405 | $105 | $50 | 3,400 |
N1406 | $115 | $55 | 3,800 |
N1407 | $125 | $60 | 4,200 |
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