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CVP Analysis.docx - CVP ANALYSIS Judith Natal Cost Volume...

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CVP ANALYSIS Judith Natal Cost Volume Profit Analysis University of Phoenix Dr. Krause
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CVP ANALYSIS Cost Volume Profit Analysis For this paper the student will write a Memo to Bargain Shoe Store management concerning Mary’s ideas of installing new lights and displays, lowering prices by 5%, and like that boosting sales with a 20% increase in volume. The student will also include calculation for the breakeven point, margin of safety ratio, and prepare a CVP Income Statement (which is attached as an Excel file), and recommend whether or not Mary’s ideas should be implemented. Memorandum Mary Willis as advertising manager for Bargain Shoe Store has suggested the following changes: the installation of a new lighting system and increased display space that will add $24,000 in fixed costs, and is also proposing a 5% price decrease ($40 to $38), which she gathers it will produce a 20% increase in sales volume. In order for Bargain Shoe Store to know the implications of such changes the following analysis will attempt to clarify.
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