Candy Rugs is holding a 2-week carpet sale at Joke's Club, a local warehouse store. Candy Rugs plans to sell carpets for $1,000 each. The company will purchase the carpets from a local distributor for $400 each, with the privilege of returning any unsold units for a full refund. Joke's Club has offered Candy Rugs two payment alternatives for the use of space. (Click the icon to view the additional information.) Read the requirements. - Option 1: A fixed payment of $17,400 for the sale period - Option 2:20\% of total revenues eamed during the sale period Assume Candy Rugs will incur no other costs. Requirements 1. Calculate the breakeven point in units for (a) option 1 and (b) option 2. 2. At what level of revenues will Candy Rugs earn the same operating income under either option? a. For what range of unit sales will Candy Rugs prefer Option 1? b. For what range of unit sales will Candy Rugs prefer Option 2? 3. Calculate the degree of operating leverage at sales of 87 units for the two rental options. 4. Briefly explain and interpret your answer to requirement 3