Sharon Willis is the advertising manager for Bargain Shoe Store. She is currently working on...
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Accounting
Sharon 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 $18,200 in fixed costs to the $133,000 currently spent. In addition, Sharon is proposing that a 5% price decrease ( $20 to $19 ) will produce a 20% increase in sales volume (20,000 to 24,000 ). Variable costs will remain at $12 per pair of shoes. Management is impressed with Sharon's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. Compute the margin of safety ratio for current operations and after Sharon's changes are introduced. (Round answers to 0 decimal places, e.g. 15\%.) Current margin of safety ratio % New margin of safety ratio %
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