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Mountain Adventures manufactures and sells 9 different models of adventure gear. Mountain Adventures is contemplating a...

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Accounting

Mountain Adventures manufactures and sells 9 different models of adventure gear. Mountain Adventures is contemplating a 4% 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 Z2601, Z2603, Z2605, and Z2607. The other five models (Z2602, Z2604, Z2606, Z2608, and Z2609) are expected to see a 6% increase in sales volume. Assess the impact of the price cut on Mountain Adventures’ profits and prepare a balance sheet.

Model

Sales Price

Variable Costs

Sales Volume

Z2601

$100

$50

1,500

Z2602

$110

$55

2,000

Z2603

$120

$60

2,500

Z2604

$130

$65

3,000

Z2605

$140

$70

3,500

Z2606

$150

$75

4,000

Z2607

$160

$80

4,500

Z2608

$170

$85

5,000

Z2609

$180

$90

5,500

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