Blossom 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 $29,580 in fixed costs to the $275,400 currently spent. In addition, Blossom is proposing that a 5% price decrease ($40 to $38) will produce a 25% increase in sales volume (20,400 to 25,500). Variable costs will remain at $25 per pair of shoes. Management is impressed with Blossom's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. (a) Compute the current break-even point in units, and compare it to the break-even point in units if Blossom's ideas are used. Current break-even point New break-even point pairs of shoes pairs of shoes

Blossom 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 $29,580 in fixed costs to the $275,400 currently spent. In addition, Blossom is proposing that a 5% price decrease ( $40 to $38 ) will produce a 25% increase in sales volume (20,400 to 25,500). Variable costs will remain at $25 per pair of shoes. Management is impressed with Blossom's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. (a) Compute the current break-even point in units, and compare it to the break-even point in units if Blossom's ideas are used. Current break-even point New break-even point pairs of shoes Dairs of shoes