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Karen Hefner, a florist, operates retail stores in several shopping malls. The average selling price...

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Karen Hefner, a florist, operates retail stores in several shopping malls. The average selling price of an arrangement is $55 and the average cost of each sale is $40. She also pays a manager $5,000 per month. A new mall is opening where Karen wants to locate a store, but the location manager is not sure about the rent method to accept. The mall operator offers the following three options for its retail store rentals: 1. paying a fixed rent of $15,000 a month, or 2. paying a base rent of $9,000 plus 10% of revenue received, or 3. paying a base rent of $4,800 plus 20% of revenue received Required: What is the selling price per unit for each option? What is the variable cost per unit for each option? What are the total fixed costs for each option? Calculate the break-even in units under each option. Calculate the net income under each option assuming that units sold are 5,000. Which option should Karen choose? Support your answer. Option 1 Option 2 Option 3 Selling Price Per Unit Variable Cost Per Unit Total Fixed Costs Break-Even in Units Net Income

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