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Alice Oritz is the advertising manoger for Value Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation of

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Alice Oritz is the advertising manoger for Value 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 $18.000 in fixed costs to the $216.000 currently spent. In addition. Alice is proposing that a 10% price decrease ( $30 to $27) will produce a 20% increase in sales volume (20.000 to 24.000). Variable costs will remain at $12 per pair of shoes. Management are impressed with Alice's ideas but are concerned about the effects that these changes will have on the break-even point. Instructions: a) Calculate the current breakeven point in units, and compare it with the breakeven point in units if Alice's ideas are used. b) Prepare CVP income statements for current operations and after Alice's changes are introduced. Would you make the changes suggested

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