Mountain Sports manufactures and sells 9 different models of mountain gear. Mountain Sports is contemplating a...
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Mountain Sports manufactures and sells 9 different models of mountain gear. Mountain Sports is contemplating a 5% price cut across all 9 models. It expects the price cut to result in a 9% increase in the number of units sold for models FF3201, FF3203, FF3205, and FF3207. The other five models (FF3202, FF3204, FF3206, FF3208, and FF3209) are expected to see a 6% increase in sales volume. Assess the impact of the price cut on Mountain Sports’ profits and prepare a profit and loss statement.
Model
Sales Price
Variable Costs
Sales Volume
FF3201
$75
$35
2,500
FF3202
$85
$40
3,000
FF3203
$95
$45
3,500
FF3204
$105
$50
4,000
FF3205
$115
$55
4,500
FF3206
$125
$60
5,000
FF3207
$135
$65
5,500
FF3208
$145
$70
6,000
FF3209
$155
$75
6,500
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