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The Cupcake Word Factory plans to open a now retail store in San Jose, Calfornia. The store will sell specially cupcakes for 56 per cupcake

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The Cupcake Word Factory plans to open a now retail store in San Jose, Calfornia. The store will sell specially cupcakes for 56 per cupcake (each cupcake has a variabie cost of $4 ) The company is negofiating its lesse for the new store. The landlord has otlered two leasing optons: 1) a lease of $2,600 per month; of 2) a monthly lease cost of $1,700 plus 5% of the companys morithy sales revenue. Requirements 1. If the Cupcake Word Factory plans to sel 2,000 cupcakes a month, which lease option would cost less oach month? Why? 2. If the company plans to soll 5.000 cupcakes a month, which lease option would be more altractive? Why? Requlrement 1. If the Cupcake World Factory plans to sell 2,000 cupcakes a month, which lease option would cost loss each month? Why? Begin by caloulating the indifference point. Seloct the equation to dotemine the indmerence point. (Abbreviations used: FC=F Fixed costa, VCU = Variablo costs por unit) (VCU(option.1) Units )+FC( option 1) =(VCU( option 2) Uns )+FC( option 2)

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