Mary Willis is the advertising manager for Bargain Shoe Store. She is currently working on a major
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Question:
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 $57,600in fixed costs to the $396,000currently spent. In addition, Mary is 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 with Mary's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety.
What is the new break even point? ___ pairs of shoes (Round to 0 decimals) Please show work.
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