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Adventure Trails manufactures and sells 9 different models of adventure gear. Adventure Trails is contemplating a...

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Accounting

Adventure Trails manufactures and sells 9 different models of adventure gear. Adventure Trails is contemplating a 6% price cut across all 9 models. It expects the price cut to result in a 10% increase in the number of units sold for models P1601, P1603, and P1605. The other six models (P1602, P1604, P1606, P1607, P1608, and P1609) are expected to see a 7% increase in sales volume. Assess the impact of the price cut on Adventure Trails’ profits and prepare a cash flow statement.

Model

Sales Price

Variable Costs

Sales Volume

P1601

$75

$35

1,500

P1602

$85

$40

2,000

P1603

$95

$45

2,500

P1604

$105

$50


Model

Sales Price

Variable Costs

Sales Volume

P1604

$105

$50

3,000

P1605

$115

$55

3,500

P1606

$125

$60

4,000

P1607

$135

$65

4,500

P1608

$145

$70

5,000

P1609

$155

$75

5,500

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