At normal level of operations, a company could make and sell 30,000 units at a price of sh. 30. The variable administrative and selling expenses are 0.75 cents per unit. The unit fixed cost is sh.4. Other costs per unit include: Material sh. 7 Labour sh. 4.30 Overheads sh. 3.50 The company is currently facing a serious challenge of competition and management ar contemplating a shut down. Should they continue, they will be able to sell only 3,000 units. I the event the firmshuts down, it will still incur unavoidable costs of sh. 18,000. 

Required:

a) Show whether or not the company should shut down (15marks)

b) Compute the firm's shut down (5 marks)