A: Compute the current break-even point in units, and compare it to the break-even point in units if Sunland ideas are used. (Round answers to 0 decimal places, e.g. 1,225.)

B: Compute the margin of safety ratio for current operations and after Sunlands changes are introduced. (Round answers to 0 decimal places, e.g. 15%.)

C: Prepare a CVP income statement for current operations and after Sunlands changes are introduced. Would you make the changes suggested?

Sunland 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, Sunland 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 Sunland's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. v (a) Compute the current break-even point in units, and compare it to the break-even point in units if Sunland's ideas are used. Current break-even point pairs of shoes New break-even point pairs of shoes