Chloe Rugs is holding a 2-week carpet sale at Jamison's Club, a local warehouse store. Chloe Rugs plans to sell carpets for $500 each. The company will purchase the carpets from a local distributor for $350 each, with the privilege of returning any unsold units for a full refund. Jamison's Club has offered Chloe Rugs two payment alternatives for the use of space (Click the icon to view the additional information.) Read the requirements Units (a) Option1 (b) Option 2 Requirement 2. At what level of revenues will Chloe Rugs ean the same operating income under either option? a. For what range of unit sales will Chloe Rugs prefer 34 0 option 1? b. For what range of unit sales will Chloe Rugs prefer option 2? Begin by determining the formula to calculate the operating income where each option is equal. (Abbreviation used: FC Fixed costs, SP Selling price, VC-Variable costs, QQuantity of units sold.) Option 1 Option 2 Now calculate the level of revenues It will take using these units equal $ 10 units to generate the same operating income under either option. The level of revenues under either option 51000 Enter any number in the edit fields and then click Check Answer. More Info to fu Option 1: A fixed payment of $5,100 for the sale period . Option 2: 10% of total revenues earned during the sale period Assume Chloe Rugs will incur no other costs Print Done iRequirements ti 1. Calculate the breakeven point in units for (a) option 1 and (b) option 2 2. At what level of revenues will Chloe Rugs earn the same operating income under either option? a. For what range of unit sales will Chloe Rugs prefer option 1? b. For what range of unit sales will Chloe Rugs prefer option 2? 3. Calculate the degree of operating leverage at sales of 102 units for the two rental options Briefly explain and interpret your answer to requirement 3 4. Done Print