# Mary Willis Is The Advertising Manager For Bargain Shoe Store 2814242

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 \$12,800 in fixed costs to the \$137,000 currently spent. In addition, Mary is proposing that a 5% price decrease (\$20 to \$19) will produce a 20% increase in sales volume (20,000 to 24,000). Variable costs will remain at \$12 per pair of shoes. Management is impressed with Mary’s ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. Compute the current break-even point in units, and compare it to the break-even point in units if Mary’s ideas are used. (Round answers to 0 decimal places, e.g. 1,225.) Current break-even point pairs of shoes New break-even point pairs of shoes Compute the margin of safety ratio for current operations and after Mary’s changes are introduced. (Round answers to 0 decimal places, e.g. 15%.) Current margin of safety ratio % New margin of safety ratio % Prepare a CVP income statement for current op Document Preview:

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Exercise-18-1….pdfProblem-18-4A….pdfProblem-18-5A….pdf

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