Birch Company normally produces and sells 33,000 units of RG-6 each month. RG-6 is a small electrical relay used in the automotive industry as a component part in various products.

birch Company normally produces and sells s3, 000 units of KG- 6 each month . KG- 6 Is a small electrical relay used in the automotive industry as a component part in various products . The selling price is $28 per unit , variable costs are $20 per unit , fixed manufacturing overhead costs total $165 ,000 per month , and fixed selling costs total $33 , 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 14 , 000 units per month . Birch Company estimates that the strikes will last for about two months , after which time sales of RG- 6 should return to normal . Due to the current low level of sales , however , Birch Company is thinking about closing its own plant during the two months that the strikes are on . If Birch Company does close its plant , it is estimated that fixed manufacturing overhead costs can be reduced to $715 , 500 per month and that fixed selling costs can be* reduced by 10% . Startup costs at the end of the shutdown period would total $14 ,000 . Since Birch Company uses just- in- time production methods , no inventories are on hand . Required :" 1- 2 . Assuming that the strikes continue for two months , compute the increase or decrease in income from closing the plant . in income 1 - 6 . Would you recommend that Birch Company close its own plant ? O Yes NO 2 . At what level of sales ( in units ) for the two-month period should Birch Company be indifferent between* closing the plant and keeping it open ?* Level of sales units