Question 1 of 2 - / 25 Ruth 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 $36,000 in fixed costs to the $272,000 currently spent. In addition, Ruth is proposing that a 5% price decrease ($40 to $38) will 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 Ruth's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. (a) Prepare a CVP income statement for current operations and after Ruth's changes are introduced. BARGAIN SHOE STORE CVP Income Statement Current New $ $ $ Would you make the changes suggested? (b) Compute the current break-even point in sales units, and compare it to the break-even point in sales units if Ruth's ideas are implemented. (Round answers to O decimal places, e.g. 5,275.) Current break-even point pairs of shoes New break-even point pairs of shoes (c). Compute the margin of safety ratio for current operations and after Ruth's changes are introduced. (Round answers to O decimal places, e.g. 15%.) Current margin of safety ratio % New margin of safety ratio %