Will's Sporting Goods is a retailer of sporting equipment. Last year, Will'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 Will'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 Will'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.) Will's Sporting Goods Contribution Margin Income Statement For the Year Ended December 31 Sales revenue - Requirements Less: Variable expenses Contribution margin Less: Fixed expenses Operating income (loss) 1. What is Will's current operating income? (Prepare a contribution margin format income statement.) 2. What is Will's contribution margin ratio? 3. What is Will's break-even point in sales dollars? (Hint: The contribution margin ratio calculated in requirement 2 is already weighted by Will's actual sales mix.) 4. Will's top management is deciding whether to embark on a $260,000 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 Will's annual operating income? Print Done