Wilsey Air Charter Services had revenue of $1,654,000 last year, with total variable costs of

$1,042,020 and fixed costs of $503,200.

Required:

1. What is the contribution margin ratio for Wilsey based on last year's data? What is the break-even point in sales revenue?

2. What was the margin of safety for Wilsey last year?

3. Wilsey is considering starting a multimedia advertising campaign that is supposed to increase sales by $120,000 per year. The campaign will cost $50,000. Is the advertising campaign a good idea? Explain.