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Adventure Sports manufactures and sells 7 different models of adventure gear. Adventure Sports is contemplating a...

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Accounting

Adventure Sports manufactures and sells 7 different models of adventure gear. Adventure Sports is contemplating a 6% price cut across all 7 models. It expects the price cut to result in an 8% increase in the number of units sold for models GG3301, GG3303, and GG3305. The other four models (GG3302, GG3304, GG3306, and GG3307) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Adventure Sports’ profits.

Model

Sales Price

Variable Costs

Sales Volume

GG3301

$70

$35

1,800

GG3302

$80

$40

2,000

GG3303

$90

$45

2,500

GG3304

$100

$50

3,000

GG3305

$110

$55

3,500

GG3306

$120

$60

4,000

GG3307

$130

$65

4,500

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