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Lisa Anderson is the advertising manager for Wildhorse Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation of
Lisa Anderson is the advertising manager for Wildhorse 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, Lisa 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 is impressed with Lisa's ideas but are concerned about the effects that these changes will have on the break-even point and the margin of safety. Your answer has been saved. See score details after the due date. Calculate the margin of safety ratio for current operations and after Lisa's changes are introduced. (Round final answers to 2 decimal places, e.g. 15.25%) Current margin of safety ratio 40 % Margin of safety ratio Lisa's changes are introduced 35 % Prepare CVP income statements for current operations and after Lisa's changes are introduced, for the year ended December 31, 2022. Would you make the changes suggested? The changes be made. WILDHORSE SHOE STORE CVP Income Statement Current New $ $
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