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Nancy Jackson is the advertising manager for Blossom Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation
Nancy Jackson is the advertising manager for Blossom 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 $18,360 in fixed costs to the $220,320 currently spent. In addition, Nancy is proposing that a 10% price decrease ($30 to $27) will produce a 20% increase in sales volume (20,400 to 24,480). Variable costs will remain at $12 per pair of shoes. Management is impressed with Nancy's ideas but are concerned about the effects that these changes will have on the break-even point and the margin of safety. Calculate the current break-even point in units, and compare it with the break-even point in units if Nancy's ideas are used. Current break-even point Break-even point if Nancy's ideas are used units units Calculate the margin of safety ratio for current operations and after Nancy's changes are introduced. (Round final answers to 2 decimal places, e.g. 15.25%) Current margin of safety ratio % Margin of safety ratio Nancy's changes are introduced % Question Part Score Prepare CVP income statements for current operations and after Nancy's changes are introduced, for the year ended December 31.2022. Would you make the changes suggested? The changes V be made. BLOSSOM SHOE STORE CVP Income Statement Current New $ $ $ $ --/2
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