please show work and circle answer... Ignore the answer i have for c and 3 i still need help wit them i dot think its correct

Alternative Production Procedures and Operating Leverage Assume Paper Mate is planning to introduce a new executive pen that can be manufactured using either a capitaleintensive method or a [aboreintensive method. The predicted manufacturing costs for each method are as follows: Capital lntan 'Ve Laborlntznsive Direct materials per unil _ $5.00 $6.05 Directiabur per unit ' s5 moi 515.0(1' Variable manufacturing overhead per unit 2 $7.00. $2.05 Fixed manufacturing overhead per year $3,140,000.00 $1,100,000.00 Paper Mate's market research department has recommended an introductory unit sales price of $33. The incremental selling costs are predicted to be $500,000 per year, plus $2 per unit sold. (a) Determine the annual breakreven point in units if Paper Mate uses the: 1. Capital-intensive manufacturing method. units 2. Laborrintensive manufactu ring method. units (b) Determine the annual unit volume at which Pa per Mate is indifferent between the two manufacturing methods, units (c) Management wants to know more about the effect of each alternative on operating leverage. 1. Explain operating leverage and the relationship between operating leverage and the volatility of earnings. OThey have little or no correlation because they are unrelated. OThey are negatively correlated, with increases in operating leverage accompanied by decreases m the volatility of earnings. They are positively correlated, with increases in operating leverage accompanied by increases in the volatility ofearnings. 2. Compute operating leverage for each alternative at a volume of 300,000 units. Round your answers two decimal places. Capital-Intensive operating leverage Labor-Intensive operating leverage 3. Which alternative has the higher operating leverage? Why? OThe capital intensive method has a higher operating leverage because of the higher variable manufacturing overhead. OThe labor intensive method has a higher operating leverage because of higher variable conversion costs. @The capital intensive method has a higher operating leverage because of the greater use afxed asses. OThe labor intensive method has a higher operating leverage because oflowervariable manufacturing overhead