Managerial Analysis

Question Description

Double check if my answer is correct and write a 150-200 words how the problem was solved

Scenario: Mary Willis is the advertising manager for Bargain Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation of a new lighting system and increased display space that will add $24,000 in fixed costs to the $270,000 in fixed costs currently spent. In addition, Mary is proposing a 5% price decrease ($40 to $38) will produce a 20% increase in sales volume (20,000 to 24,000). Variable costs will remain at $24 per pair of shoes. Management is impressed with Mary’s ideas but concerned about the effects these changes will have on the break-even point and the margin of safety.

Compute the margin of safety ratio for current operations and after Mary’s changes are introduced (Round to nearest full percent)

Prof. Angela

4.6/5

Calculate Price


Price (USD)
$
Need Help? Reach us here via Whatsapp.