Schmidt Men's Clothing's revenues and cost data for 2021 are as follows: (Click the icon to view the data.) Mr. Schmidt, the owner of the store, is unhappy with the operating results. An analysis of other operating costs reveals that it includes $50,000 variable costs, which vary with sales volume, and $15,000 (fixed) costs. Required Revenues Cost of goods sold (all variable costs) Gross margin Operating costs: $ 500,000 200,000 300,000 Salaries fixed $ 180,000 Sales commissions (8% of sales) 40,000 Depreciation on equipment and fixtures 19,000 Store rent ($4,500 per month) 54,000 Other operating costs 65,000 358,000 $ (58,000) Operating income (loss) 1. Compute the contribution margin of Schmidt Men's Clothing. 2. Compute the contribution margin percentage. 3. Mr. Schmidt estimates that he can increase units sold and, hence, revenues by 25% by incurring additional advertising costs of $13,000. Calculate the impact of the additional advertising costs on operating income. 4. What other actions can Mr. Schmidt take to improve operating income?