### Question details

Cost-Volume-Profit Analysis
\$ 25.00

Purpose of Assignment

The Case Study focuses on CVP (Cost-Volume-Profit), break-even, and margin of safety analyses which allows students to experience working through a business scenario and applying these tools in managerial decision making.

Assignment Steps

Resources: Generally Accepted Accounting Principles (GAAP), U.S. Securities and Exchange Commission (SEC)

Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.

Scenario: Mary 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 \$24,000 in fixed costs to the \$270,000 in fixed costs currently spent. In addition, Mary is proposing a 5% price decrease (\$40 to \$38) will produce a 20% increase in sales volume (20,000 to 24,000). Variable costs will remain at \$24 per pair of shoes. Management is impressed with Mary's ideas but concerned about the effects these changes will have on the break-even point and the margin of safety.

Complete the following:

• Compute the current break-even point in units, and compare it to the break-even point in units if Mary's ideas are used.
• Compute the margin of safety ratio for current operations and after Mary's changes are introduced (Round to nearest full percent).
• Prepare a CVP (Cost-Volume-Profit) income statement for current operations and after Mary's changes are introduced.

Prepare a maximum 700-word informal memo to management addressing Mary's suggested changes.

• Explain whether Mary's changes should be adopted. Why or why not? Analyze the above information (three bullet points above) and use this information to support your suggestion.

Show your work in Microsoft® Word or Excel®.

Complete calculations/computations using Microsoft® Word or Excel®.

Format your assignment consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment.

Due on: 19 Nov, 2017 03:49:00 Asked on: 13 Nov, 2017 08:50:55
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### LaVarra

Available solutions
• \$ 25.00
Cost-Volume-Profit Analysis
The Ca
This solution has not purchased yet. Submitted on: 14 Nov, 2017 02:19:02 Word Count 1 Attachments:

### Wordpower1

• \$ 15.00
Cost-Volume-Profit Analysis Memo + worksheet
MEMO From: To: Bargain Shoe Store Manager Date: Subject: Cost-Volume-Profit Analysis I would like to review the proposed idea submitted by Mary Willis, the advertising manager for Bargain Shoe Store. Mary’s
This solution has not purchased yet. Submitted on: 14 Nov, 2017 07:43:31 Word Count 28 Attachments:

### Deepeyes

• \$ 25.00
Cost-Volume-Profit Analysis
The Case S
This Solution has been Purchased 1 time Submitted on: 17 Nov, 2017 05:32:32 Average Rating for this solution is A+ Word Count 2 Attachments: