Mary Willis is the advertising manager for bargain show 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 $19,000 in fixed costs to the $128,000 currently spent. In addition, Mary is proposing that a 5% price decrease ($20-$19) 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 Marys ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety.

Problem 19-4A Mary Willis is the advertising manager for Bargain Shoe Store. She is currently working on a mager promotional campaign. Her ideas include the installation of a new lighting systerm and Increased display space that wil remsin at $12 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. Compute the current break-even point in units, and compare it to the break-even point in units if Mary's ideas are used. (Roand answers to 0 declmal places, e.g. 1,225.) wil add $19,000 in hed costs to the $128,000 o ently spent t adation, Mary is prep sing that a S% pr e decrease $20 to $19) I pr due 20% e ease n sales voume (20,000 to 24,000). Va able at Current break-even point New breek-even point Campute the margin of safety ratio for current operations and after Mary's changes are introduced (Round answers to O declimal places,.g 159) pairs of shoes pairs of shces Current margin of safety ratio hew margin of safety ratio PrepareCVP income statementforo current operations and after Mary's changes are introduced MIAIN SHOE CVP Income Current Would you make the changes suppested