The Cupcake World Factory plans to open a new retail store in Lansing, Michigan. The store will sell specialty cupcakes for $$6$ per cupcake $($each cupcake has a variable cost of $$4.)$ The company is negotiating its lease for the new store. The landlord has offered two leasing options: $1)$ a lease of $$2,600$ per month; or $2)$ a monthly lease cost of $$1,700$ plus $5\%$ of the company's monthly sales revenue.

Requirements

If the Cupcake World Factory plans to sell $2,500$ cupcakes a month, which lease option would cost less each month? Why?

If the company plans to sell $4,200$ cupcakes a month, which lease option would be more attractive? Why?

Requirement $1.$ If the Cupcake World Factory plans to sell $2,500$ 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$)$

option $1)$ Units