Chloe Rugs is holding a 2-week carpet sale at Jean's Club, a local warehouse store. Chloe Rugs plans to sell carpets for $800 each. The company will purchase the carpets from a local distributor for S560 each, with the privilege of returning any unsold units for a full refund. Jean's Club has offered Chloe Rugs two payment alternatives for the use of space. i (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 in units. Number of units to breakeven = Fixed cost Contribution margin per unit Calculate the breakeven point in units for option 1. then option 2. (Round your answers up to the nearest whole number. Enter "O" for zero balances.) More Info Units 36 (a) Option 1 (b) Option 2 0 Option 1: A fixed payment of $8,840 for the sale period . Option 2: 15% of total revenues earned during the sale period Assume Chloe Rugs will incur no other costs. Requirement 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? 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, Q = Quantity of units sold.) Option 1 (SP * Q) - VC * Q) FC =( SP Option 2 * Q). (VC FC Print Done Now calculate the level of revenues. units to generate the same operating income under either option. The level of revenues under either It will take using these units equal s 57,600 72 option - X X Requirements a. For what range of unit sales will Chloe Rugs prefer option 12 Option 1 would be preferred when units sold 1 exceed the units you determined for the level of revenues when the two options earned the same operating income. . b. For what range of unit sales will Chloe Rugs prefer option 2? Chloe Rugs would prefer option 2 when units sold are less than the units you determined for the level of revenues when the two options earned the same operating income. 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? Calculate the degree of operating leverage at sales of 72 units for the two rental options. Briefly explain and interpret your answer to requirement 3. Requirement 3. Calculate the degree of operating leverage at sales of 72 units for the two rental options. 3. Begin by determining the formula to calculate the degree of operating leverage. Then, calculate the degree of operating leverage for option 1. then option 2. {Round your answers to two decimal places. X.XX) 4. Degree of operating leverage Contribution margin . Operating income = Option 1 Option 2 ( Print ( Done