Cathy Rugs is holding a 2-week carpet sale at Jean's Club, a local warehouse store. Cathy Rugs plans to sell carpets for $950 each. The company will purchase the carpets from a local distributor for 5760 each, with the privilege of returning any unsold units for a full refund. Jean's Club has offered Cathy Rugs two payment alternatives for the use of space. (Click the icon to view the additional information.) Read the requirements. Requirement 1. Calculate the breakeven point in units for (a) Option 1 and (b) Option 2. Begin by determining the formula to calculate the breakeven point More Info Number of units to breakeven = Fixed cost Calculate the breakeven point in units for option 1, then option 2 . Units 39 0 Option 1: A fixed payment of $7,410 for the sale period Option 2: 10% of total revenues earned during the sale period Assume Cathy Rugs will incur no other costs. (a) Option 1 (b) Option 2 Print Done Requirement 2. At what level of revenues will Cathy Rugs earnt prefer option 1? b. For what range of unit sales will Cathy Rugs p Begin by determining the formula to calculate the operating incon Variable costs, Q = Quantity of units sold.) Option 1 (SP Q) - (VC * Q) FC = ( SP Now calculate the level of revenues. 1. Calculate the breakeven point in units for (a) option 1 and (b) option 2. 2. At what level of revenues will Cathy Rugs earn the same operating income under either option? a. For what range of unit sales will Cathy Rugs prefer Option 1? b. For what range of unit sales will Cathy Rugs prefer Option 2? 3. Calculate the degree of operating leverage at sales of 65 units for the two rental options 4. Briefly explain and interpret your answer to requirement 3. It will take units to generate the same operating incom using these units equal Print Done