Terry Medical Supply is a retailer of home medical equipment. Last year, Terry's sales revenues totaled $6,900,000. Total expenses were $2,500,000. Of this amount, approximately $1,380,000 were variable, while the remainder were fixed. Since Terry'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 Requirement 1. What is Terry's current operating income? Begin by identifying the formula to compute the operating income Sales revenue Variable expenses Fixed expenses Operating income Requirements The operating income is $ 4,400,000 Requirement 2. What is Terry's contribution margin ratio? Begin by identifying the formula to compute the contribution margin ratio. - X Contribution margin Sales revenue Contribution margin ratio (Enter the ratio as a whole percent.) The contribution margin ratio is % 1. What is Terry's current operating income? 2. What is Terry's contribution margin ratio? 3. What is the company's breakeven point in sales dollars? (Hint: The contribution margin ratio calculated in Requirement 2 is already weighted by the company's actual sales mix.) 4. Terry'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 20% 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? Print Done Enter any number in the edit fields and then click Check