Happy Days, Inc. sells widgets for $65 each. Variable costs are $40 per unit, and fixed costs total $120,000.

Evaluate the following statements:

1. Happy Days will need to sell 8,800 units to earn a profit of $100,000
2. When 6,000 units are sold, the degree of operating leverage is 5
3. When 5,000 units are sold, the margin of safety in dollars is $200

Group of answer choices

Both Statements #1 and #2 are true

Both Statements #1 and #3 are true

Both Statements #1 and #3 are true

All of the Statements are false

All of the Statements are true

Only Statement #2 is true

Only Statement #3 is true

Only Statement #1 is true