S7-17 (similar to) Question Help The Tasty Treats Factory plans to open a new retail store in Washington, DC. The store will sell specialty cupcakes for $5 per cupcake (each cupcake has a variable cost of $2.) The company is negotiating its lease for the new store. The landlord has offered two leasing options: 1) a lease of $5,000 per month; or 2) a monthly lease cost of $2,000 plus 10% of the company's monthly sales revenue. Requirements 1. If the Tasty Treats Factory plans to sell 5,500 cupcakes a month, which lease option would cost less each month? Why? 2. If the company plans to sell 7,000 cupcakes a month, which lease option would be more attractive? Why? Requirement 1. If the Tasty Treats Factory plans to sell 5,500 cupcakes a month, which lease option would cost less each month? Why? Begin by calculating the indifference point. Select the equation to determine the indifference point. (Abbreviations used: FC = Fixed costs, VCU = Variable costs per unit) (VCU (option 1) Units) + FC (option 1) = (VCU (option 2) x Units) + FC (option 2) The Indifference point (in number of cupcakes) is |. Enter any number in the edit fields and then click Check Answer.