Requirement 4 . Scott's top management is deciding whether to embark on a $180,000 advertising campaign. The marketing firm has projected annual sales volume to increase by 16% 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? If Scott embarks on this advertising campaign, sales revenue and variable costs will will cause the contribution margin to the advertising. Scott Medical Supply is a retailer of home medical equipment. Last year, Scott's sales revenues totaled $6,100,000. Total expenses were $2,590,000. Of this amount, approximately $1,342,000 were variable, while the remainder were fixed. Since Scott's offers thousands of different products, its managers prefer to calculate the breakeven point in terms of sales dollars rather than units. Read the requirements