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Question 2 (Total 15 marks) Cheery Co. sells pillows for $50 each. The manufacturing cost, all variable, is $20 per pillow. The company is planning on renting an exhibition booth for both display and selling purposes at the annual crafts and art convention. The convention coordinator allows three options for each participating company. They are: 1. paying a fixed booth fee of $10,020, or 2. paying an $8,000 fee plus 10% of revenue made at the convention, or 3. paying 20% of revenue made at the convention. Required: a) Compute the breakeven sales in pillows of each option. (6 marks) b) Which option should Cheery Co. choose, assuming sales are expected to be 800 pillows? (4 marks) c) What is the margin of safety in units assuming 800 pillows is the planned sales level and option 1 is taken? (2 marks) d) Ignore part (b and c), if company decides to pick option 1. Explain what effects this would have on a company's cost structure as well as assessing its business risk using Cost-volume-profit analysis