Color Rugs is holding a two-week carpet sale at Jerry's Club, a local warehouse store. Color Rugs

Question:

Color Rugs is holding a two-week carpet sale at Jerry's Club, a local warehouse store. Color 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. Jerry's Club has offered Color Rugs to pay $5,000 for the use of space.
Required
1. Calculate the breakeven point in units for (a) option 1 and (b) option 2.
2. At what level of revenue
3. Calculate the degree of operating leverage at sales of 100 units

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Breakeven units 5000500350 ...View the full answer

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