More info - Option 1: A fixed payment of $5,100 for the sale period - Option 2: 10% of total revenues earned during the sale period Assume Color Rugs will incur no other costs. Color Rugs is holding a 2-week carpet sale at Jacob's Club, a local warehouse store. Color Rugs plans to sel carpets for $500 each. The company will purchase the carpets from a local distrbutor for $350 each, with the privilege of returning any unsold units for a full refund. Jacob's Club has offered Color Rugs two payment aternatives for the use of space. (i) (Click the icen to view the additional information) Read the reourements. Requirement 1. Calculate the breakeven point in units foe (a) Option 1 and (b) Opton 2. Begin by determining the formula to calculate the breskeven point in units. Requirements 1. Calculate the breakeven point in units for (a) option 1 and (b) option 2. 2. At what level of revenues will Color Rugs earn the same operating income under either option? a. For what range of unit sales will Color Rugs prefer Option 1? b. For what range of unit sales will Color Rugs prefer Option 2? 3. Calculate the degree of operating leverage at sales of 102 units for the two rental options. 4. Briefly explain and interpret your answer to requirement 3. More info - Option 1: A fixed payment of $5,100 for the sale period - Option 2: 10% of total revenues earned during the sale period Assume Color Rugs will incur no other costs. Color Rugs is holding a 2-week carpet sale at Jacob's Club, a local warehouse store. Color Rugs plans to sel carpets for $500 each. The company will purchase the carpets from a local distrbutor for $350 each, with the privilege of returning any unsold units for a full refund. Jacob's Club has offered Color Rugs two payment aternatives for the use of space. (i) (Click the icen to view the additional information) Read the reourements. Requirement 1. Calculate the breakeven point in units foe (a) Option 1 and (b) Opton 2. Begin by determining the formula to calculate the breskeven point in units. Requirements 1. Calculate the breakeven point in units for (a) option 1 and (b) option 2. 2. At what level of revenues will Color Rugs earn the same operating income under either option? a. For what range of unit sales will Color Rugs prefer Option 1? b. For what range of unit sales will Color Rugs prefer Option 2? 3. Calculate the degree of operating leverage at sales of 102 units for the two rental options. 4. Briefly explain and interpret your answer to requirement 3