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Peak Performance Ltd. manufactures and sells 8 different models of sports gear. Peak Performance Ltd. is contemplating a 6% price cut across all 8 models.

Peak Performance Ltd. manufactures and sells 8 different models of sports gear. Peak Performance Ltd. is contemplating a 6% price cut across all 8 models. It expects the price cut to result in an 8% increase in the number of units sold for models WW4901, WW4903, and WW4905. The other five models (WW4902, WW4904, WW4906, WW4907, and WW4908) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Peak Performance Ltd.’s profits.

Model

Sales Price

Variable Costs

Sales Volume

WW4901

$80

$40

1,800

WW4902

$90

$45

2,000

WW4903

$100

$50

2,500

WW4904

$110

$55

3,000

WW4905

$120

$60

3,500

WW4906

$130

$65

4,000

WW4907

$140

$70

4,500

WW4908

$150

$75

5,000

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