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Prepare a CVP income statement for current operations and after Sheridan's changes are introduced. Compute the margin of safety ratio for current operations and after
Prepare a CVP income statement for current operations and after Sheridan's changes are introduced. Compute the margin of safety ratio for current operations and after Sheridan's changes are introduced. (Round answers to 0 decimal places, e.g. 15\%) Current margin of safety ratio New marigin of safety ratio eTextbook and Media Attempts: 0 of 5 used Sheridan 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 $26,680 in fixed costs to the $248,400 currently spent. In addition, Sheridan is proposing that a 5% price decrease (\$40 to $38 ) will produce a 25\% increase in 5ales volume {18,400 to 23.000). Variable costs will remain at $25 per palr of shoes. Management is impressed with Sheridan's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. Compute the current break even point in unitsiand compare it to the break. even point in units it 5 heridan's ideas are used. bairs of hoee
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