Victor medical supply is a retailer of home medical equipment. Last year, Victor sales revenues totaled $6,700,000. total expenses were $2,700,000. of this amount approximately $1,608,000 were variable, while were the reminder were fixed. Since Victor's offers thousands of different products, it's managers prefer to calculate the break even point in terms of sales dollars rather than units.

1. What is Victor's current operating income? 2. What is Victor'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. Victor's top management is deciding whether to embark on a $220,000 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 the company's annual operating income