Romper Rugs is holding two-week carpet sale at Tommys Club, a local warehouse store. Romper Rugs plans to sell carpets for $500 each. The company will purchase the carpets from a local distributor for $350 each, with the privilege of returning any unsold units for a full refund. Tommys club has offered Romper Rugs two payment options for the use of space Option 1: A fixed payment of $5 000 for the sale period Option 2: 10% of total revenue earned during the sale period. Assume Romper Rugs will incur no other costs. Required: a. Calculate the breakeven point in units for : (i) option 1 and (ii) option 2 (5 marks) b. At what level of revenues will Romper Rugs earn the same profit under either option? (i) For what range of unit sales will the company prefer option 1? (ii) For what range of unit sales will the company prefer option 2? ACT202 Assignment, Semester 2, 2021 Page 4 (10 Marks) c. Calculate the degree of operating leverage at sales of 100 carpets for the two rental options. (5 marks) d. Explain and interpret your answer to requirement c) (5 marks)