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Hiking Pro manufactures and sells 8 different models of hiking gear. Hiking Pro is contemplating a...

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Accounting

Hiking Pro manufactures and sells 8 different models of hiking gear. Hiking Pro is contemplating a 5% price cut across all 8 models. It expects the price cut to result in a 10% increase in the number of units sold for models HH3401, HH3403, HH3405, and HH3407. The other four models (HH3402, HH3404, HH3406, and HH3408) are expected to see a 6% increase in sales volume. Assess the impact of the price cut on Hiking Pro’s profits and prepare a balance sheet.

Model

Sales Price

Variable Costs

Sales Volume

HH3401

$85

$40

2,000

HH3402

$95

$45

2,500

HH3403

$105

$50

3,000

HH3404

$115

$55

3,500

HH3405

$125

$60

4,000

HH3406

$135

$65

4,500

HH3407

$145

$70

5,000

HH3408

$155

$75

5,500

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