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Scenario: Mary Willis is the advertising manager for Bargain Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation

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Scenario: Mary 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 $24,000 in xed costs to the $2?0,000 in xed costs currently spent. In addition, 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. Complete the fol lowing: - Compute the current breakeven point in units, and compare it to the breakeven point in units if Mary's ideas are used 0 Compute le margin of safety ratio for current operations and after Mary's changes are introduced [Round to nearest full percent). 0 Prepare a CVP [Cost-VolumePmt} income statement for current operations and after Mary's changes are introduced

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