2) Refer to the Sports-Strength's Contribution Format Income Statement for the year ended February 1, 2019 (Exhibit 2) and answer the following:

d. The Messenger, a local newspaper, has approached Martin Cole with a $20,000 annual ad campaign. If Martin accepts the ad campaign, what will change in Sports-Strength's operating profit equation?

e. Assume Martin Cole accepts The Messenger's ad campaign and as a result Sports-Strength sells 60,000 jerseys next year. make a contribution format income

statement for the year.

f. Discuss the results shown in part e above. Should the ad campaign be accepted? Comment on the distribution of costs between fixed and variable for Sports Strength. How can the information on cost behavior and the contribution margin statement be used by management to make decisions and to plan? Give two specific examples of decisions and plans that could be made with this information.