1. What is Will's current operating income? 2. What is Will's contribution margin ratio? 3. What is the company's breakeven point in sales dollars? (Hint: The contribution margin ratio calculated in Requirement 2 is already weighted by the company's actual sales mix.) 4. Will's top management is deciding whether to embark on a $210,000 advertising campaign. The marketing firm has projected annual sales volume to increase by 20% as a result of this campaign. Assuming that the projections are correct, what effect would this advertising campaign have on the company's annual operating income? Will Medical Supply is a retailer of home medical equipment. Last year, Will's sales revenues totaled $6,900,000. Total expenses were $2,500,000. Of this amount, approximately $1,380,000 were variable, while the remainder were fixed. Since Will's offers thousands of different products, its managers prefer to calculate the breakeven point in terms of sales dollars rather than units. Requirement 1. What is Will's current operating income? Begin by identifying the formula to compute the operating income. The operating income is Requirement 2. What is Will's contribution margin ratio? Begin by identifying the formula to compute the contribution margin ratio. = Operating income Contribution margin ratio (Enter the ratio as a whole percent.) The contribution margin ratio is %. Requirement 3. What is the company's breakeven point in sales dollars? (Hint: The contribution margin ratio calculated in Requirement 2 is already weighted by the company's actual sales mix.) Will Medical Supply is a retailer of home medical equipment. Last year, Will's sales revenues totaled $6,900,000. Total expenses were $2,500,000. Of this amount, approximately $1,380,000 were variable, while the remainder were fixed. Since Will's offers thousands of different products, its managers prefer to calculate the breakeven point Requirement 3. What is the company's breakeven point in sales dollars? (Hint: The contribution margin ratio calculated in Requirement 2 is already weighted by the company's actual sales mix.) Begin by identifying the formula to compute the breakeven point in sales dollars. + = Breakeven sales in dollars (Round your answer up to the nearest whole dollar.) The breakeven point in sales dollars is Requirement 4. Will's top management is deciding whether to embark on a $210,000 advertising campaign. The marketing firm has projected annual sales volume to increase by 20% as a result of this campaign. Assuming that the projections are correct, what effect would this advertising campaign have on the company's annual operating income? by %, which %. However, fixed costs will by due to If Will embarks on this advertising campaign, sales revenue and variable costs will will cause the contribution margin to the advertising. by What effect would this advertising campaign have on Will's annual operating income? The effect would be operating income of Will Medical Supply is a retailer of home medical equipment. Last year, Will's sales revenues totaled $6,900,000. Total expenses were $2,500,000. Of this amount, approximately $1,380,000 were variable, while the remainder were fixed. Since Will's offers thousands of different products, its managers prefer to calculate the breakeven point Requirement 3. What is the company's breakeven point in sales dollars? (Hint: The contribution margin ratio calculated in Requirement 2 is already weighted by the company's actual sales mix.) Begin by identifying the formula to compute the breakeven point in sales dollars. ( + (R dollar.) Th Contribution margin per unit Re Contribution margin ratio by If wil = the Wh Th Fixed expenses Operating income Units sold Variable expenses = Breakeven sales in dollars ciding whether to embark on a $210,000 advertising campaign. The marketing firm has projected annual sales volume to increase g that the projections are correct, what effect would this advertising campaign have on the company's annual operating income? sales revenue and variable costs will by by %, which %. However, fixed costs will by due to have on Will's annual operating income? erating income of