hosen Problem 1 (25 points) Bob's Retail Clothing store had revenues and cost data for 2021 as follows Revenues $1,000,000 Cost of Goods Sold ta variable cost) 500.000 Gross Margin 400,000 Operating costs: Salaries fowed 590,000 Sales commission (8 of sales) 30,000 Depreciation of equipment and fixtures 45,000 Store rent (53,000 per month) 36,000 Other operating costs 120,000 380,000 Operating income $20.000 An analysis of other operating costs' reveals that it includes $100,000 variable costs, which vary with sales volume, and $29,000 fixed costs. Bob, the owner of the store, is unhappy with the operating results Required: 1. Compute the total contribution margin and (ii) the contribution margin percentage for Bob's Retail Clothing store. (8 points) 2. Compute breakeven in sales revenue. (5 points) 3. Bob estimates that he can increase units sold, and hence revenues by 5% by incurring additional advertising costs of $10,000. Calculate the impact of the additional advertising costs on operating income. (8 points) 4. Explain how cost structure (mix of fixed and variable costs) affects the sensitivity of profits to changes in volume. (4 points)