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Pharoah Willis is the advertising manager for Bargain Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation of

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Pharoah Willis is the advertising manager for Bargain 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 $14.000 in fixed costs to the $133,000 currently spent. In addition Pharoah is proposing that a 5% price decrease ($20 to $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 Pharoah's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety (a) Your answer is correct Compute the current break-even point in units, and compare it to the break-even point in units if Pharoah's ideas are used, Current break-even point 162 pairs of shoes New break-even point 21000 pairs of shoes Compute the margin of safety ratio for current operations and after Pharoah's changes are introduced (Round answers to o decimal places, 0.8, 15%) Current margin of safety ratio New margin of safety ratio %

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