Curt Rugs is holding a 2-week carpet sale at Jerry's Club, a local warehouse store. Curt 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. Jerry's Club has offered Curt Rugs two payment alternatives for the use of space. Click the icon to view the additional information.) Read the requirements Requirement 1. calculate the preakeven point in units tor (as opuon and Dy option z. 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.) Units (a) Option 1 (b) Option 2 Requirement 2. At what level of revenues will Curt Rugs earn the same operating income under either option? a. For what range of unit sales will Curt Rugs prefer option 1? b. For what range of unit sales will Curt 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 Option 2 ( SP * Q) - ( VC * Q) - FC = ( SP * Q) - VC * Q) - FC Now calculate the level of revenues. units to generate the same operating income under either option. The level of revenues under either option it will take using these units equal $ Enter any number in the edit fields and then click Check Answer. * More Info Option 1: A fixed payment of $8,400 for the sale period Option 2: 20% of total revenues earned during the sale period Assume Curt Rugs will incur no other costs. Print Done Requirements 1. Calculate the breakeven point in units for (a) option 1 and (b) option 2. 2. At what level of revenues will Curt Rugs earn the same operating income under either option? a. For what range of unit sales will Curt Rugs prefer option 1? b. For what range of unit sales will Curt 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. Print Print Done Done