Problem information: Puffy Pillow Company sells pillows for $25.00 each. The manufacturing cost, all variable, is $10 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 rental options for each participating company. They are: Option 1. paying a fixed booth fee of $5,010 a month, or Option 2. paying an $4,000 fee plus 10% of revenue made at the convention, or Option 3. paying 20% of revenue made at the convention. Required: 1. Calculate the contribution margin per unit for each of the three options. 2. Compute the breakeven sales (dollars and units) and the monthly rent at break-even for each of the three options. 3. Calculate the degree of operating leverage at sale of 350 units for each of the three rental options. 4. At what level of revenues will Puffy Pillow Company earn the same operating income under option 1 and option 2

Kandon enterprises, inc., has two operating divisions; one manufactures machinery and the other breeds and sells horses. both divisions are considered separate components as defined by generally accepted accounting principles. the horse division has been unprofitable, and on november 15, 2018, kandon adopted a formal plan to sell the division. the sale was completed on april 30, 2019. at december 31, 2018, the component was considered held for sale. on december 31, 2018, the company’s fiscal year-end, the book value of the assets of the horse division was $415,000. on that date, the fair value of the assets, less costs to sell, was $350,000. the before-tax loss from operations of the division for the year was $290,000. the company’s effective tax rate is 40%. the after-tax income from continuing operations for 2018 was $550,000. required: 1. prepare a partial income statement for 2018 beginning with income from continuing operations. ignore eps disclosures. 2. prepare a partial income statement for 2018 beginning with income from continuing operations. assuming that the estimated net fair value of the horse division’s assets was $700,000, instead of $350,000. ignore eps disclosures.