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Question 2 of 2 -/30 Ivanhoe Willis is the advertising manager for Bargain Shoe Store. She is currently working on a major promotional campaign.
Question 2 of 2 -/30 Ivanhoe 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 $24,940 in fixed costs to the $232 200 currently spent. In addition, Ivanhoe is proposing that a 5% price decrease ($40 to $38) will produce a 25% increase in sales. volume (17.200 to 21.500). Variable costs will remain at $25 per pair of shoes. Management is impressed with Ivanhoe's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety.
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