Reference no: EM133067597

Question - Wildhorse 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 $35,380 in fixed costs to the $329,400 currently spent. In addition, Wildhorse is proposing that a 5% price decrease ($40 to $38) will produce a 25% increase in sales volume (24,400 to 30,500). Variable costs will remain at $25 per pair of shoes. Management is impressed with Wildhorse's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. Prepare a CVP income statement for current operations and after Wildhorse's changes are introduced.