Elite Bikes manufactures and sells 12 different models of high-end bicycles. Elite Bikes is contemplating a 5% price cut across all 12 models. It expects the price cut to result in an 8% increase in the number of units sold for models S1901, S1903, S1905, and S1907. The other eight models (S1902, S1904, S1906, S1908, S1909, S1910, S1911, and S1912) are expected to see a 4% increase in sales volume. Assess the impact of the price cut on Elite Bikes’ profits and prepare a retained earnings statement.
•Model: S1901
oSales Price: $200
oVariable Costs: $90
oSales Volume: 1,500
•Model: S1902
oSales Price: $210
oVariable Costs: $95
oSales Volume: 2,000
•Model: S1903
oSales Price: $220
oVariable Costs: $100
oSales Volume: 2,500
•Model: S1904
oSales Price: $230
oVariable Costs: $105
oSales Volume: 3,000
•Model: S1905
oSales Price: $240
oVariable Costs: $110
oSales Volume: 3,500
•Model: S1906
oSales Price: $250
oVariable Costs: $115
oSales Volume: 4,000
•Model: S1907
oSales Price: $260
oVariable Costs: $120
oSales Volume: 4,500
•Model: S1908
oSales Price: $270
oVariable Costs: $125
oSales Volume: 5,000
•Model: S1909
oSales Price: $280
oVariable Costs: $130
oSales Volume: 2,200
•Model: S1910
oSales Price: $290
oVariable Costs: $135
oSales Volume: 1,800
•Model: S1911
oSales Price: $300
oVariable Costs: $140
oSales Volume: 1,500
•Model: S1912
oSales Price: $310
oVariable Costs: $145
oSales Volume: 1,200