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if the first 3 photos are not clear, please look at the last 3 photos. Thanks a lot . 11: More Info Option 1: A
if the first 3 photos are not clear, please look at the last 3 photos. Thanks a lot
. 11: More Info Option 1: A fixed payment of $10,260 for the sale period Option 2: 10% of total revenues earned during the sale period Assume Chloe Rugs will incur no other costs. . 12: Requirements 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 76 units for the two rental options. 4. Briefly explain and interpret your answer to requirement 3. Prin 2. Chloe Rugs is holding a 2-week carpet sale at Jerry's Club, a local warehouse store. Chloe Rugs plans to sell carpets for $900 each. The company will purchase the carpets from a local distributor for $630 each, with the privilege of returning any unsold units for a full refund. Jerry's Club has offered Chloe Rugs two payment alternatives for the use of space. 11(Click the icon to view the additional information.) Read the requirements 12 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 = (1) (2) 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 Chloe Rugs earn the same operating income under either option? a. For what range of unit sales will Chloe Rugs prefer option 17 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 Option 2 (4) (5) (7) (3) X Q) X Q) =((6) X Q). X Q) (8) Now calculate the level of revenues. It will take units to generate the same operating income under either option. The level of revenues under either option using these units equal $ a. For what range of unit sales will Chloe Rugs prefer option 1? the units you determined for the level of revenues when the two options Option 1 would be preferred when units sold (9) earned the same operating income. b. For what range of unit sales will Chloe Rugs prefer option 22 Chloe Rugs would prefer option 2 when units sold (10) the units you determined for the level of revenues when the two options eamed the same operating income. Requirement 3. Calculate the degree of operating leverage at sales of 76 units for the two rental options. 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) Degree of (11) (12) operating leverage Option 1 Option 2 Requirement 4. Briefly explain and interpret your answer to requirement 3. (13) The results indicate that when sales are 76 units, a percentage change in will result in times that percentage change in for option 1 and times that percentage change in for option 2 (14) (15) 11: More Info Option 1: A fixed payment of $10,260 for the sale period Option 2: 10% of total revenues earned during the sale period Assume Chloe Rugs will incur no other costs. 12: Requirements 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 76 units for the two rental options. 4. Briefly explain and interpret your answer to requirement 3. O loss O loss loss Print 12. Chloe Rugs is holding a 2-week carpet sale at Jerry's Club, a local warehouse store. Chloe Rugs plans to sell carpets for $900 each. The company will purchase the carpets from a local distributor for $630 each, with the privilege of returning any unsold units for a full refund. Jerry's Club has offered Chloe Rugs two payment alternatives for the use of space. 1 (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 (2) 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 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: FCFixed costs, SP = Selling price, VC = Variable costs, Q = Quantity of units sold.) Option 1 Option 2 (4) (5) (7) * Q). xa) (6) * Q). X Q) (8) Now calculate the level of revenues, It will take units to generate the same operating income under either option. The level of revenues under either option using those units equal $ Print It will take units to generate the same operating income under either option. The level of revenues under elther option using these units equal $ a. For what range of unit sales will Chloe Rugs prefer option 1? the units you determined for the level of revenues when the two options Option 1 would be preferred when units sold (9) 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 (10) the units you determined for the level of revenues when the two options eamed the same operating income. Requirement 3. Calculate the degree of operating leverage at sales of 76 units for the two rental options. 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) Degree of (11) (12) = operating leverage Option 1 Option 2 Requirement 4. Briefly explain and interpret your answer to requirement 3. The results indicate that when sales are 76 units, a percentage change in (13) will result in times that percentage change in (14) for option 1 and times that percentage change in (15) for option 2 Step by Step Solution
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