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Pharoah Willis is the advertising manager for Bargoin 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 Bargoin 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 $27.600 in fixed costs to the $272.000 currently spent. In addition, Pharoah is proposing that a 5% price decrease (640 to $38) w produce a 20% increase in sales volume (20,000 to 24,000). Variable costs will remain at $24 per pair of shoes. Management is impressed with Pharoah's idees but concerned about the effects that these changes will have or 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 Pharoah's ces are used. Current break-even point 17000 pairs of shoes New break even point 21400 pairs of shoes (b) Compute the margin of safety ratio for current operations and after Pharoah's changes are introduced. (Ro Current margin of safety ratio % New margin of safety ratio %

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