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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 $18,200 in fixed costs to the $133,000 currently spent. In addition, Carla Vista 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 Carla Vistas 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 O decimal places, e.g 1,225.) Current break-even point New break-even point pairs of shoes pairs of shoes LINK TO TEXT LINK TO TEXT LINK TO TEXT Compute the margin of safety ratio for current operations and after Mary's changes are introduced. (Round answers to 0 decimal places, eg, 15%.) Current margin of safety ratio New margin of safety ratio Prepare a CVP income statement for current operations and after Mary's changes are introduced. BARGAIN SHOE STORE CVP Income Statement Current New Would you make the changes suggested? Click if you would like to Show Work for this question: Open Show Work

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