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Birch Company normally produces and selis 50,000 units of RG.6 eoch month. The selling price is $30 per unit, variable costs are $10 per unit,

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Birch Company normally produces and selis 50,000 units of RG.6 eoch month. The selling price is $30 per unit, variable costs are $10 per unit, faed manufacturing overthead costs total $155,000 per month, and fixed selling costs total $48,000 per month. Employment.contract strikes in the companies that purchase the bulk of the RG.6 units have caused Birch Company's sales to temporarily drop to only 10,000 units per month. Birch Company estimates that the strikes will last for two months, after which time soles of RG 6 should retum to normal. Due to the current low level of sales, Birch Company is thinking about closing down its own plant during the strke, which would reduce its fixed manufacturing overhead costs by $48,000 per month and its fixed selling costs by 10\%. Start-up costs at the end of the shutdown period would total' $15,000. Because Birch Company uses Lean Production methods, no ifwentories are on hand Required: 1. What is the financial advantage (disadvantoge) if Birch closes ins own plant for two months? 2. 5hould Birch ciose the plant for two months? 3. At what level of unit sales for the two-month period would Birch Company be indifferent between closing the plant or keeping it open

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