Welch Men's Clothing revenues and cost data for 2017 are as follows: Revenues Cost of goods sold (all variable costs) Gross margin $600,000 (300,000 300,000 Operating costs: Salaries (fixed) Sales commissions (12% of sales) Depreciation of equipment Store rent ($3,500 per month) Other operating costs $140,000 72,000 10,000 42,000 45,000 $309,000 Operating income (loss) $(9,000) Mr. Welch, the owner of the store, is unhappy with the operating results. An analysis of other operating costs reveals that it includes $30,000 variable costs, which vary with the sales volume, and $15,000 (fixed) costs. Required: 1. Compute the contribution margin of Welch Men's Clothing. 2. Compute the contribution margin percentage. 3. Mr. Welch estimates that he can increase units sold, and hence revenues by 25% by incurring additional advertising costs of $8,000. Calculate the impact of the additional advertising costs on operating income