Mary Wills is the advertising manager for Bargain Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation of new lighting system and increased display space that will add $26,270 in fixed costs to the $275,230 currently spent. In addition, Mary is proposing that a 5% price decrease ($41-$39) will produce a 19% increase in sale volume (22,510 to 26,787). Variable costs will remain at $25 per pair of shoesManagement is impressed with Mary's ideas but concerned about the effects that thses changes will have on the break-even point and the margin of saftey.

A. Compute the current break-even point in units, and compare it to the break-even point in units if Mary;s ideas are used.

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

C. Prepare a CVP income Statement for current operations and after Mary's changes are introduced.