Crane 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 $51,000 in fixed costs to the $411,000 currently spent. In addition, Crane is proposing that a 5% price decrease ($60 to $57) will produce a 20% increase in sales volume (20,000 to 24,000). Variable costs will remain at $36 per pair of shoes. Management is impressed with Crane's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. Prepare a CVP income statement for current operations and after Crane's changes are introduced. BARGAIN SHOE STORE CVP Income Statement Current New Sales 1200000 1368000 Variable Expenses 720000 i 864000 i Contribution Margin 480000 504000 Fixed Expenses 453600 Net Income/(Loss) $ 60000 $ 50400 Would you make the changes suggested? No