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Sports Unlimited manufactures and sells 8 different models of sports equipment. Sports Unlimited is contemplating a 5% price cut across all 8 models. It expects

Sports Unlimited manufactures and sells 8 different models of sports equipment. Sports Unlimited is contemplating a 5% 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 CC2901, CC2903, CC2905, and CC2907. The other four models (CC2902, CC2904, CC2906, and CC2908) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Sports Unlimited’s profits.

Model

Sales Price

Variable Costs

Sales Volume

CC2901

$70

$35

1,800

CC2902

$80

$40

2,000

CC2903

$90

$45

2,500

CC2904

$100

$50

3,000

CC2905

$110

$55

3,500

CC2906

$120

$60

4,000

CC2907

$130

$65

4,500

CC2908

$140

$70

5,000

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