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Mary Willis is the advertising manager for Blue Spruce Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation
Mary Willis is the advertising manager for Blue Spruce Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation of a new lighting system and increased display apce that will add $51,000 in fixed costs to the $411,000 currently spent. In addition, Mary is proplsing 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 Marys ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety.
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