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Trail Blazers manufactures and sells 7 different models of hiking equipment. Trail Blazers is contemplating a...

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Accounting

Trail Blazers manufactures and sells 7 different models of hiking equipment. Trail Blazers is contemplating a 5% price cut across all 7 models. It expects the price cut to result in a 12% increase in the number of units sold for models N1401, N1403, and N1405. The other four models (N1402, N1404, N1406, and N1407) are expected to see a 6% increase in sales volume. Assess the impact of the price cut on Trail Blazers’ profits and prepare a profit and loss statement.

Model

Sales Price

Variable Costs

Sales Volume

N1401

$65

$30

1,800

N1402

$75

$35

2,200

N1403

$85

$40

2,600

N1404

$95

$45

3,000

N1405

$105

$50

3,400

N1406

$115

$55

3,800

N1407

$125

$60

4,200

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