Carmel Rugs is holding a 2-week carpet sale at Jean's Club, a local warehouse store. Carmel Rugs plans to sell carpets for $700 each. The company will purchase the carpets from a local distributor for $420 each, with the privilege of returning any unsold units for a full refund. Jean's Club has offered Carmel Rugs two payment alternatives for the use of space. (Click the icon to view the additional information.) Read the requirements. More Info Requirement 1. Calculate the breakeven point in units for (a) option 1 and (b) option 2. Begin by determining the formula calculate the breakeven point in units. Option 1: A fixed payment of $8,400 for the sale period Option 2: 20% of total revenues earned during the sale period Assume Carmel Rugs will incur no other costs. Number of units to breakeven = Fixed cost 1 Contribution margin per unit Calculate the breakeven point units for option 1, then option 2. (Round your answers up to the nearest whole number. Enter Print Done Units Requirements (a) Option 1 (b) Option 2 1. Calculate the breakeven point in units for (a) option 1 and (b) option 2. 2. At what level of revenues will Carmel Rugs earn the same operating income under either option? a. For what range of unit sales will Carmel Rugs prefer option 1? b. For what range of unit sales will Carmel Rugs prefer option 2? 3. Calculate the degree of operating leverage at sales of 60 units for the two rental options. 4. Briefly explain and interpret your answer to requirement 3