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Speedy Cycles manufactures and sells 10 different models of racing bicycles. Speedy Cycles is contemplating a...

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Accounting

Speedy Cycles manufactures and sells 10 different models of racing bicycles. Speedy Cycles is contemplating a 7% price cut across all 10 models. It expects the price cut to result in a 10% increase in the number of units sold for models H801, H803, H805, and H807. The other six models (H802, H804, H806, H808, H809, and H810) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Speedy Cycles’ profits and prepare a sales revenue report.

Model

Sales Price

Variable Costs

Sales Volume

H801

$85

$40

1,800

H802

$95

$45

2,500

H803

$105

$50

3,000

H804

$115

$55

3,500

H805

$125

$60

4,000

H806

$135

$65

4,500

H807

$145

$70

2,200

H808

$155

$75

1,800

H809

$165

$80

1,500

H810

$175

$85

1,200

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