Question 2 A). Briefly explain the behavior of Variable costs and Fixed costs. Ge B). Jessica Daniel is the advertising manager for Thrifty 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 $30,000 in fixed costs to the $430,000 currently spent. In addition, Jessica is proposing that a 10% price decrease (from $50 to $45) will produce an increase in sales volume from 22,000 to 28,000 units. Variable costs will remain at $25 per pair of shoes. Management is impressed with Jessica's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. 1 Question 2 A). Briefly explain the behavior of Variable costs and Fixed costs. Ge B). Jessica Daniel is the advertising manager for Thrifty 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 $30,000 in fixed costs to the $430,000 currently spent. In addition, Jessica is proposing that a 10% price decrease (from $50 to $45) will produce an increase in sales volume from 22,000 to 28,000 units. Variable costs will remain at $25 per pair of shoes. Management is impressed with Jessica's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. 1

View Policies Show Attempt History Current Attempt in Progress Your answer is incorrect. Cullumber's Candles will be producing a new line of dripless candles in the coming years and has the choice of producing the candles in a large factory with a small number of workers or a small factory with a large number of workers. Each candle will be sold for $10. If the large factory is chosen, the cost per unit to produce each candle will be $3.60. The cost per unit will be $7.50 in the small factory. The large factory would have fixed cash costs of $2.30 million and a depreciation expense of $300,000 per year, while those expenses would be $470,000 and $100,000, respectively, in the small factory. Calculate the pretax operating cash flow break-even point for both factory choices for Cullumber's Candles. (Round answers to nearest whole units e.g. 152.) pretax operating cash flow breakeven point for the large factory is units and for the small factory is eTextbook and Media Save for Later Last…

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