Urban Mobility manufactures and sells 8 different models of electric scooters. Urban Mobility is contemplating a...
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Urban Mobility manufactures and sells 8 different models of electric scooters. Urban Mobility is contemplating a 4% price cut across all 8 models. It expects the price cut to result in a 10% increase in the number of units sold for models G701, G703, G705, and G707. The other four models (G702, G704, G706, and G708) are expected to see a 6% increase in sales volume. Assess the impact of the price cut on Urban Mobility’s profits and prepare a comprehensive break-even analysis.
Model
Sales Price
Variable Costs
Sales Volume
G701
$150
$75
1,200
G702
$160
$80
1,500
G703
$170
$85
1,800
G704
$180
$90
2,000
G705
$190
$95
2,200
G706
$200
$100
2,500
G707
$210
$105
2,700
G708
$220
$110
3,000
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