Carol 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 $24,600 in freind costs to the $128.000 currently spent. In addition, Carol is proposing that a 5% price decrease [$20 to $19) will produce a 20% increase in vales volume (20,000 to 240001 Variable costs will remain at $12 per pair of shoes. Management is impressed with Carol's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. Your answer correct Prepare a CVP income statement for current operations and after Carol's changes are introduced. BARGAIN SHOE STORE CVP Income Statement Variable Expen Contribution Margin Floed Excenses Net Income Loss! eTextbook and Media Your answer is correct. Current 400 000 240000 660.000 125.000 New 456000 288.000 168,000 Attempts: 2 of 3 used Compute the current break-even point in sales units and compare it to the break-even point in sales units if Carol's ideas are implemented (found answers to Odecimal places, 5.275) Current break-even point New break-ever point eTextbook and Media 16.000 pairs of shoes pairs of shoes Compute the much of safety ratio for current operations and after Carol's changes are introduced. Round wars to decid Current margin of safety ratio New margin of safety ratio anges suggested?
Carol 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 $24,600 in freind costs to the $128.000 currently spent. In addition, Carol is proposing that a 5% price decrease [$20 to $19) will produce a 20% increase in vales volume (20,000 to 240001 Variable costs will remain at $12 per pair of shoes. Management is impressed with Carol's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. Your answer correct Prepare a CVP income statement for current operations and after Carol's changes are introduced. BARGAIN SHOE STORE CVP Income Statement Variable Expen Contribution Margin Floed Excenses Net Income Loss! eTextbook and Media Your answer is correct. Current 400 000 240000 660.000 125.000 New 456000 288.000 168,000 Attempts: 2 of 3 used Compute the current break-even point in sales units and compare it to the break-even point in sales units if Carol's ideas are implemented (found answers to Odecimal places, 5.275) Current break-even point New break-ever point eTextbook and Media 16.000 pairs of shoes pairs of shoes Compute the much of safety ratio for current operations and after Carol's changes are introduced. Round wars to decid Current margin of safety ratio New margin of safety ratio anges suggested?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
am. 129.
Transcribed Image Text:Carol 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 $24,600 in freind costs to the
$128.000 currently spent. In addition, Carol is proposing that a 5% price decrease [$20 to $19) will produce a 20% increase in vales
volume (20,000 to 240001 Variable costs will remain at $12 per pair of shoes. Management is impressed with Carol's ideas but
concerned about the effects that these changes will have on the break-even point and the margin of safety.
Your answer correct
Prepare a CVP income statement for current operations and after Carol's changes are introduced.
BARGAIN SHOE STORE
CVP Income Statement
Variable Expen
Contribution Margin
Floed Excenses
Net Income Loss!
eTextbook and Media
Your answer is correct.
Current
400 000
240000
660.000
125.000
New
456000
288.000
168,000
Attempts: 2 of 3 used
Compute the current break-even point in sales units and compare it to the break-even point in sales units if Carol's ideas are
implemented (found answers to Odecimal places,
5.275)
Current break-even point
New break-ever point
eTextbook and Media
16.000
pairs of shoes
pairs of shoes
Compute the much of safety ratio for current operations and after Carol's changes are introduced. Round wars to decid
Current margin of safety ratio
New margin of safety ratio
anges suggested?
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