Hiker's Choice manufactures and sells 11 different models of hiking gear. Hiker's Choice is contemplating a...
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Hiker's Choice manufactures and sells 11 different models of hiking gear. Hiker's Choice is contemplating a 5% price cut across all 11 models. It expects the price cut to result in a 9% increase in the number of units sold for models X2401, X2403, X2405, and X2407. The other seven models (X2402, X2404, X2406, X2408, X2409, X2410, and X2411) are expected to see a 6% increase in sales volume. Assess the impact of the price cut on Hiker's Choice’s profits and prepare a profit and loss statement.
Model
Sales Price
Variable Costs
Sales Volume
X2401
$70
$35
2,500
X2402
$80
$40
3,000
X2403
$90
$45
3,500
X2404
$100
$50
4,000
X2405
$110
$55
4,500
X2406
$120
$60
5,000
X2407
$130
$65
5,500
X2408
$140
$70
6,000
X2409
$150
$75
6,500
X2410
$160
$80
7,000
X2411
$170
$85
7,500
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