Chris Rugs is holding a 2-week carpet sale at Jack's Club, a local warehouse store. Chris 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. Jack's Club has offered Chris 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 in units. 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 "0" for zero balances.) Requirement 2. At what level of revenues will Chris Rugs earn the same operating income under either option? a. For what range of unit sales will Chris Rugs prefer option 1 ? b. For what range of unit sales will Chris 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.) Now calculate the level of revenues. It will take units to generate the same operating income under either option. The level of revenues under using these units either option equal Chris Rugs is holding a 2-week carpet sale at Jack's Club, a local warehouse store. Chris 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. Jack's Club has offered Chris 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 in units. 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 "0" for zero balances.) Requirement 2. At what level of revenues will Chris Rugs earn the same operating income under either option? a. For what range of unit sales will Chris Rugs prefer option 1 ? b. For what range of unit sales will Chris 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.) Now calculate the level of revenues. It will take units to generate the same operating income under either option. The level of revenues under using these units either option equal
