Cute Rugs is holding a 2-week carpet sale at Josh's Club, a local warehouse store. Cute Rugs plans to sell carpets for $550 each. The company will purchase the carpets from a local distributor for $440 each, with the privilege of returning any unsold units for a full refund. Josh's Club has offered Cute Rugs two payment alternatives for the use of space. (Click the icon to view the additional information.) Read the requirements. Requirements 1. Calculate the breakeven point in units for (a) option 1 and (b) option 2. 2. At what level of revenues will Cute Rugs earn the same operating income under either option? a. For what range of unit sales will Cute Rugs prefer Option 1? b. For what range of unit sales will Cute Rugs prefer Option 2? 3. Calculate the degree of operating leverage at sales of 55 units for the two rental options. 4. Briefly explain and interpret your answer to requirement 3. X Cute Rugs is holding a 2-week carpet sale at Josh's Club, a local warehouse store. Cute Rugs plans to sell carpets for $550 each. The company will purchase the carpets from a local distributor for $440 each, with the privilege of returning any unsold units for a full refund. Josh's Club has offered Cute Rugs two payment alternatives for the use of space. (Click the icon to view the additional information.) Read the requirements. More info 4 Option 1: A fixed payment of $3,630 for the sale period 4 Option 2: 10% of total revenues earned during the sale period Assume Cute Rugs will incur no other costs. - X Requirement 4. Briefly explain and interpret your answer to requirement 3. The results indicate that, when sales are 55 units, a percentage change in will result in fixed costs times that percentage change in for option 1 and times that percentage change in for option 2.