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Barker Company has a single product called a Zet. The company normally produces and sells 81,000 Zets each year at a selling price of $40
Barker Company has a single product called a Zet. The company normally produces and sells 81,000 Zets each year at a selling price of $40 per unit. The company's unit costs at this level of activity are given below: A number of questions relating to the production and sale of Zets are given below. Each question is independent. One of the materials used in the production of Zets is obtained from a foreign supplier. Civil unrest in the supplier's country has caused a cutoff in material shipments that is expected to last for three months. Barker Company has enough material on hand to operate at 25% of normal levels for the three-month period. As an alternative, the company could close the plant down entirely for the three months. Closing the plant would reduce fixed manufacturing overhead costs by 40% during the three-month period and the fixed selling expenses would continue at two-thirds of their normal level. What would be the impact on profits of closing the plant for the three-month period? (Input the amount as a positive value. Round your intermediate calculations of units produced and sold to the nearest whole number. Do not round your other intermediate calculations. Round your final answer to nearest whole number.)
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