otal output accordingly, or (3) discontinue Size M and conduct an advertising campaign to expand the sales of Size S so that the entire plant capacity can continue to be used. :34,560 for the rental of additional warehouse space would yield an additional 130% in Size S sales volume. It is also assumed that the increased production of Size S would utilize the plant facilities released by the discontinuance of Size M. The sales and costs have been relatively stable over the past few years, and they are expected to remain so for the foreseeable future. The income statement for the past year ended June 30 , 20Y9, is as follows: V Check My Work 1. For each size and in total compute the following: Check My Work 3. Recast the income statement using the same format as in requirement (1) with only S and L sizes. After computing contribution margin for S, L and total, subtract fixed manufacturing costs and operating expenses from the total contribution margin to obtain the total operating income. 4. By how much would total annual operating income increase above its present level if Proposal 3 is accepted