13. Compassion Company normally produces and sells 30,000 units of Product A each month. Product A is a small electrical relay used in the automotive industry as a component part in various products. The selling prices is $22 per unit, variable costs are $14 per unit, fixed manufacturing overhead costs total $150,000 per month, and fixed selling costs total $30,000 per month. Employment-contract strikes in the companies that purchase the bulk of Product A units have caused Compassion Company's sales to temporarily drop to only 8,000 units per month. Compassion Company estimates that the strikes will last for about two months, after which time, sales of Product A should return to normal. Due to the current low level of sales, however, Compassion Company is thinking about closing down its own plant during the two months that the strikes overhead costs can be reduced by P45,000 per month and that fixed selling costs can be reduced by 10%. Start-up costs at the end of the shut-down period would total $8,000. Since Compassion Company uses just-in-time (JIT) production methods, no inventories are on hand. Assuming that the strikes continue for two months, would you recommend that Compassion Company close its own plant or continue operations? * Your answer 14. Compassion Company normally produces and sells 30,000 units of Product A each month. Product A is a small electrical relay used in the automotive industry as a component part in various products. The selling prices is P22 per unit, variable costs are 14 per unit, fixed manufacturing overhead costs total $150,000 per month, and fixed selling costs total $30,000 per month. Employment-contract strikes in the companies that purchase the bulk of Product A units have caused Compassion Company's sales to temporarily drop to only 8,000 units per month. Compassion Company estimates that the strikes will last for about two months, after which time, sales of Product A should return to normal. Due to the current low level of sales, however, Compassion Company is thinking about closing down its own plant during the two months that the strikes overhead costs can be reduced by $45,000 per month and that fixed selling costs can be reduced by 10%. Start-up costs at the end of the shut-down period would total $8,000. Since Compassion Company uses just-in-time (JIT) production methods, no inventories are on hand. At what level of sales (in units) for the two-month period should Compassion Company be indifferent between closing the plant and keeping it open? * Your answer