Summit Gear Inc. manufactures and sells 7 different models of outdoor gear. Summit Gear Inc....
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Summit Gear Inc. manufactures and sells 7 different models of outdoor gear. Summit Gear Inc. is contemplating a 4% price cut for all models. It expects the price cut to result in an 8% increase in units sold for models QQ4301, QQ4303, and QQ4305. The other four models (QQ4302, QQ4304, QQ4306, and QQ4307) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Summit Gear Inc.’s profits and prepare the equity statement. •Model: QQ4301 oSales Price: $75 oVariable Costs: $35 oSales Volume: 2,000 •Model: QQ4302 oSales Price: $85 oVariable Costs: $40 oSales Volume: 2,500 •Model: QQ4303 oSales Price: $95 oVariable Costs: $45 oSales Volume: 3,000 •Model: QQ4304 oSales Price: $105 oVariable Costs: $50 oSales Volume: 3,500 •Model: QQ4305 oSales Price: $115 oVariable Costs: $55 oSales Volume: 4,000 •Model: QQ4306 oSales Price: $125 oVariable Costs: $60 oSales Volume: 4,500 •Model: QQ4307 oSales Price: $135 oVariable Costs: $65 oSales Volume: 5,000
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