Summit Gear manufactures and sells 6 different models of outdoor gear. Summit Gear is contemplating...
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Summit Gear manufactures and sells 6 different models of outdoor gear. Summit Gear 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 EE3101, EE3103, and EE3105. The other three models (EE3102, EE3104, and EE3106) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Summit Gear’s profits and prepare the equity statement. •Model: EE3101 oSales Price: $85 oVariable Costs: $40 oSales Volume: 2,000 •Model: EE3102 oSales Price: $95 oVariable Costs: $45 oSales Volume: 2,500 •Model: EE3103 oSales Price: $105 oVariable Costs: $50 oSales Volume: 3,000 •Model: EE3104 oSales Price: $115 oVariable Costs: $55 oSales Volume: 3,500 •Model: EE3105 oSales Price: $125 oVariable Costs: $60 oSales Volume: 4,000 •Model: EE3106 oSales Price: $135 oVariable Costs: $65 oSales Volume: 4,500
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