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Summit Sports manufactures and sells 10 different models of sports equipment. Summit Sports is contemplating a...

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Accounting

Summit Sports manufactures and sells 10 different models of sports equipment. Summit Sports is contemplating a 6% price cut across all 10 models. It expects the price cut to result in a 9% increase in the number of units sold for models U2101, U2103, U2105, and U2107. The other six models (U2102, U2104, U2106, U2108, U2109, and U2110) are expected to see a 6% increase in sales volume. Assess the impact of the price cut on Summit Sports’ profits.

Model

Sales Price

Variable Costs

Sales Volume

U2101

$100

$45

1,000

U2102

$110

$50

1,500

U2103

$120

$55

2,000

U2104

$130

$60

2,500

U2105

$140

$65

3,000

U2106

$150

$70

3,500

U2107

$160

$75

4,000

U2108

$170

$80

4,500

U2109

$180

$85

5,000

U2110

$190

$90

5,500

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