CraneWillis 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 $51,000in fixed costs to the $411,000currently spent. In addition,Craneis proposing that a 5% price decrease ($60to $57) will produce a20% increase in sales volume (20,000to24,000). Variable costs will remain at $36per pair of shoes. Management is impressed withCrane's 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 ifCrane's ideas are used.

Compute the margin of safety ratio for current operations and afterCrane's changes are introduced.

Prepare a CVP income statement for current operations and afterCrane's changes are introduced.

Would you make the changes suggested?