Cullumber 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 $30,740 in fixed costs to the $286,200 currently spent. In addition, Cullumber is proposing that a 5% price decrease ($40 to $38) will produce a 25% increase in sales volume (21,200 to 26,500). Variable costs will remain at $25 per pair of shoes. Management is impressed with Cullumber's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. of you uror! (a) dinclo Compute the current break-even point in units, and compare it to the break-even point in units if Cullumber's ideas are used. Current break-even point pairs of shoes New break-even point pairs of shoes (b) Compute the margin of safety ratio for current operations and after Cullumber's changes are introduced. (Round answers to O decimal places, e.g. 15%) Current margin of safety ratio New margin of safety ratio % Prepare a CVP income statement for current operations and after Cullumber's changes are introduced. BARGAIN SHOE STORE CVP Income Statement Current New Would you make the changes suggested?
