Wendy barnes is the advertising manager for value shoe

Reference no: EM13597744

Wendy Barnes is the advertising manager for Value 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 $72,144 in fixed costs to the $241,200 currently spent. In addition, Wendy is proposing that a 4% price decrease ($42 to $40.32) will produce a 21% increase in sales volume (21,500 to 26,015). Variable costs will remain at $24 per pair of shoes. Management is impressed with Wendy's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety.

Reference no: EM13597744

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