E4-55B Find the break-even point and evaluate an advertising decision at a multiproduct company (Learning Objectives 3, 4, & 5) Red Deer Sporting Goods is a retailer of sporting equipment. Last year, Red Deer's sales revenues totalled $6,400,000. Total expenses were $2,800,000. Of this amount, approxi- mately $1,792,000 were variable, while the remainder were fixed. Since Red Deer Sporting Goods offers thousands of different products, its managers prefer to calculate the break- even point in terms of sales dollars rather than units. Requirements 1. What is Red Deer Sporting Goods' current operating income? (Prepare a contribution margin format income statement.) 2. What is Red Deer's contribution margin ratio? 3. What is Red Deer's break-even point in sales dollars? (Hint: The contribution margin ratio calculated in Requirement 2 is already weighted by Red Deer Sporting Goods actual sales mix.) What does it mean? 4. Red Deer's top management is deciding whether to embark on a $190,000 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, how would this advertising campaign affect Red Deer Sporting Goods' annual operating income