Answered step by step
Verified Expert Solution
Question
1 Approved Answer
missed the margin of safety ratio Current Attempt in Progress Mary Willis is the advertising manager for Bramble Shoe Store. She is currently working on
missed the margin of safety ratio
Current Attempt in Progress Mary Willis is the advertising manager for Bramble 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 $57.600 in fixed costs to the $396,000 currently spent In addition, Mary is proposing that a 5% price decrease (560 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 Mary's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. ta Your answer is correct. Compute the current break-even point in units, and compare it to the break-even point in units if Mary's ideas are used. (Round answers to 0 decimal places, eg. 1.225.) Current break-even point 16500 pairs of shoes New break-even point 21600 pairs of shoes eTextbook and Media Attempts: 1 of 3 used - Your answer is partially correct. Compute the margin of safety ratio for current operations and after Mary's changes are introduced. (Round answers to O decimal places, es 15%) Current margin of safety ratio 34 New margin of safety ratio 10 36 Textbook and Media Attempts: 1 of 3 used Submit Answer The perts of this question must be completed in order. This part will be available when you complete the part aboveStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started