Question
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
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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