Requirements

What is Scott's current operating income? $($Prepare a contribution margin format income statement.$)$

What is Scott's contribution margin ratio?

What is Scott's break$-$even point in sales dollars? $($Hint: The contribution margin ratio calculated in requirement $2$ is already weighted by Scott's actual sales mix.$)$

Scott's top management is deciding whether to embark on a $$210,000$ advertising campaign. The marketing firm has projected annual sales volume to increase by $18\%$ as a result of this campaign. Assuming that the projections are correct, what effect would this advertising campaign have on Scott's annual operating income?

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Part $5$ of $7$

Points: $13\mathrm{.}75$ of $25$

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Scott's Sporting Goods is a retailer of sporting equipment. Last year, Scott's sales revenues totalled $$5,500,000.$ Total expenses were $$2,700,000.$ Of this amount, approximately $$1,560,000$ were variable, while the remainder were fixed. Since Scott'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 Scott's Sporting Goods' current operating income? $($Prepare a contribution margin format income statement$)$

Complete the contribution margin income statement $($Enter losses with a minus sign or parentheses.$)$

$\backslash$table$[[\backslash$table$[[$Scott$\text{'}$s Sporting Goods$],[$Contribution Margin Income Statement$],[$For the Year Ended December $31]]],[$Sales revenue,$$5,500,000$