Question 6 of 16 This test: 16 point(s) possible Submit test This question: 1 point(s) possible Young's Sporting Goods is a retailer of sporting equipment Last year, Young's sales revenues totalled $5,400,000. Total expenses were $2,800,000. Of this amount, approximately $1,792,000 were variable, while the remainder were fixed. Since Young's 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 Requirement 1. What is Young's Sporting Goods' current operating income? (Prepare a contribution margin formal income statement.) Complete the contribution margin income statement (Enter losses with a minus sign or parentheses.) Young's Sporting Goods Contribution Margin Income Statement For the Year Ended December 31 Sales revenue Less. Variable expenses Contribution margin Less Fixed expenses Operating income (loss) Requirement 2. What is Young's contribution margin ratio? Begin by identifying the formula to compute the contribution margin ratio. = Contribution margin ratio The contribution margin ratio is |(Round your answer to two decimal places.) Requirement 3. What is Young's break-even point in sales dollars? (Hint The contribution margin ratio calculated in requirement 2 is already weighted by Young's actual sales mix) Begin by identifying the formula to compute the break-even point in sales dollars = Break-even sales in dollars The break-even point in sales dollars is $(Round your answer up to the nearest whole dollar.) Requirement 4. Young's top management is deciding whether to embark on a $290,000 advertising campaign. The marketing firm has projected annual sales volume to increase by 12% as a result of this campaign. Assuming that the projections are correct, what effect would this advertising campaign have on Young's annual operating income? If Young's embarks on this advertising campaign, sales revenue and vanable costs will v by | |%. which will cause the contribution margin to by ]%% Fixed costs wil |by $ due to the advertising campaign. What effect would this advertising campaign have on Young's annual operating income? The effect would be operating income of $