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Birch Company normally produces and sells 45,000 units of RG.6 each month. The selling price is $20 per unit, variable costs are $10 Employment-contract strikes

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Birch Company normally produces and sells 45,000 units of RG.6 each month. The selling price is $20 per unit, variable costs are $10 Employment-contract strikes in the companies that purchase the bulk of the RG-6 unis have caused Birch Company's sales to temporartly drop to only 12,000 units per month. Birch Company estimates that the strikes will fast for two months, after which time sales of RG.6 shoufd return to normal. Due to the current low level of sales, Birch Company is thinking about closing down its own 10% Start-up costs at the end of the shutdown period would total \$15,000. Because Birch Company uses Lean Production methods, no inveritories are on hand. Recitred: 1. What is the financial advantage (disadvantage) ir Birch closes its own plant for two months? 2. Should Birch close 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? Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) If Birch closes its own plant for two months? Birch Company normally produces and sells 45,000 units of RG-6 each month. The seling price is $20 per unit, variable costs are $10 ner unit fived manufacturing owerhead costs total $175000 per month and fixed selling costs total $48000 per month. Employment-contract strikes in the companies that purchase the buk of the RG.6 units have caused Birch Company's sales to temporarily drop to only 12,000 units per month. Birch Company estimates that the strikes will last for two months, after which time sales of RG.6 should retum to normal. Due to the current low level of sales, Birch Company is thinking about closing down its own 10% Startup costs at the end of the shutdown period would total $15,000. Because Birch Company uses Lean Production methods, no inventories are on hand: Required: 1. What is the financial advantage (disadvantage) ir Birch closes its own plant for two months? 2. Shoule birch close the plant for two months? 3. At what level of unit sales for the two-month period would Birch Company be indifferent berween closing the plant or ketping it open? Complete this question by entering your answers in the tabs below. At what leval of unit galef for the two-month period would Birch Company be indifferent botween closing the plant or keeping it open

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