Scenario: Mary is proposing 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 Mary's ideas but concerned about the effects these changes will have on the break-even point and the margin of safety.

How would I ,compute and display the current break-even point in units and compare it to the break-even point in units if Mary's ideas are used?

How can I compute and display the margin of safety ratio for current operations and after Mary's changes are introduced (Round to nearest full percent)?

What would a prepared CVP (Cost-Volume-Profit) income statement for current operations and after Mary's changes are introduced look like?