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*ANSWER = D BUT SHOW FULL WORKING HOW TO GET THE ANSWER Spruce Company has a single product called a Zet. The company normally products
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Spruce Company has a single product called a Zet. The company normally products and sells 80,000 Zets each year. The company's unit costs at this level of activity are given below: One of the materials used in the production of Zets is obtained from a foreign supplier. supplier's country has caused a cutoff in material shipments that is expected to last for three. months. Spruce Company has enough material on hand to operate at 40% of normal levels for the three-month period. alternative. the company could close the plant down entirely for the three months. Closing th-reduce fixed manufacturing overhead costs by 30% during the three-month period and the fixed selling expenses would continue at two-thirds of their normal level. What is the selling price per unit zet that would make the company indifferent between (i) closing the plant and (ii) not closing the plant for the month period? $35.50 $43.50 $24.00 S31.50 Spruce Company has a single product called a Zet. The company normally products and sells 80,000 Zets each year. The company's unit costs at this level of activity are given below: One of the materials used in the production of Zets is obtained from a foreign supplier. supplier's country has caused a cutoff in material shipments that is expected to last for three. months. Spruce Company has enough material on hand to operate at 40% of normal levels for the three-month period. alternative. the company could close the plant down entirely for the three months. Closing th-reduce fixed manufacturing overhead costs by 30% during the three-month period and the fixed selling expenses would continue at two-thirds of their normal level. What is the selling price per unit zet that would make the company indifferent between (i) closing the plant and (ii) not closing the plant for the month period? $35.50 $43.50 $24.00 S31.50Step by Step Solution
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