41. Mitchell LLC is a manufacturing company based in Boulder, Colorado. Mitchell manufactures car stereo equipment for high-end performance cars. Mitchell provides the following fringe benefits to employees: 1. Mitchell made an agreement with the N-Shape athletic facility in the same building as Mitchell’s offices. The monthly fee is generally $100, but is paid for by Mitchell for any employees who are interested. 2. Mitchell allows employees to purchase equipment for themselves at a 40% discount, even though the cost of goods sold is 45%. Which of these employee fringe benefits will be taxable to employees? (a) 1 only. (b) 2 only. Page 11 of 12 (c) Both 1 and 2. (d) Neither 1 nor 2.