Chapter 18

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Part 2:

Part 3:

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 $58.800 in red costs to the $399,000 currently spent. In addition, Mary is proposing that a 5% price decrease ($60 to 557) will produce a 20% increase in sales volume (20,000 to 24000). Variable costs will remain at $36 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 ble 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 decimal places 1.225.) Current break-even point pairs of shoes New break-even point pairs of shoes e Textbook and Media Compute the margin of safety ratio for current operations and after Mary's changes are introduced (Round answers to decimal places. e. 15%) Current margin of safety ratio New margin of safety ratio eTextbook and Media Prepare a CVP income statement for current operations and after Mary's changes are introduced CVP Income Statement Current New Would you make the changes suggested? B o moany has the following information available for September 2017 Unit selling price of video game consoles Unit variable costs Total forced costs Units sold $712 $498 $96,300 1,068 Compute the unit contribution margin Unit contribution margin eTextbook and Media Prepare a CVP income statement that shows both total and per unit amounts. BILLINGS COMPANY CVP Income Statement Total Per Unit Compute Billings' break-even point in units. Break-even point in units e Textbook and Media Prepare a CVP Income statement for the break-even point that shows both total and per unit amounts. BILLINGS COMPANY CVP Income Statement Total Per Unit In 2016, Manhoff Company had a break-even point of $271,000 based on a selling price of $5 per unit and fixed costs of $130,000. In 2017, the selling price and the variable costs per unit did not change, but the break-even point increased to $441,000 Compute the variable costs per unit and the contribution margin ratio for 2016. (Round Variable cost per unit to 2 decimal places. 65 225 and Contribution margin ratio to decimal places. e... 25) Variable costs per unit Contribution margin ratio eTextbook and Media Compute the increase in fixed costs for 2017. (Round answer to decimal places, s 1.225.) Increase in forced cost $