Part B:

part C: prepare a CVP income statement for current operations and after Marys chnages are introduced

Mary Willis is the advertising manager for Riverbed 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 $39,000 in fixed costs to the $423,000 currently spent. In addition, Mary is proposing that a 5% price decrease ($60 to $57) will produce a 20% increase in sales volume (20,000 to 24,000). Variable costs will remain at $36 per pair of shoes, Management is impressed with Mary's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety Your answer is correct Compute the current break-even point in units, and compare it to the break-even point in units if Mary's ideas are used. (Round answers to decimal places, es 1,225.) 17.625 pairs of shoes Current break-even point New break-even point 22.000 pairs of shoes e Textbook and Media Attempts: 1 of 3 used (b) Compute the margin of safety ratio for current operations and after Mary's changes are introduced. (Round answers to decimal places, eg. 15%) % Current margin of safety ratio New margin of safety ratio %