(Note: This type of decision is similar to dropping a product line.) Nicholas Company manufactures a fast -bonding glue, normally producing and selling 64,000 litres of the glue each month. This glue, which is known as M,7, is used in the wood industry to manufacture plywood. The selling price of MJ/7 is $50 per litre, variable costs are $30 per lite, foxed manufacturing owethead costs in the plant total $368,000 per month, and the fixed selling costs total $492.800 per month Strikes in the mills that purchase the bulk of the MJ 7 glue have caused Nicholas Compary's sales to fempocarlly drop to only 16,000 lities per month. Nicholas Company's management estimates that the stakes will last for two months, affer which sales of Mj77 should return to normal, Due to the current low level of sales, Nicholas Company's management is thinking about closing down the plant during the strike. If Nicholas Company doe-s close down the plant, fixed manufacturing ovethead costs can be reduced by $96,000 per inonth and fixed selling costs can be reduced by 10%. Start-up costs at the end of the shutdown period would total $10,560. Since Nicholas Company uses lean proctuction methods, no inventories are on hand. Required: 1-a. Assuming that the strikes continue for two months, compute the increase or decrease in income from closing the plant. 1.b. Would your recommend that Nicholas Company close us own plant? 2. At what level of sales (in litres) for the two-month period should Nicholas Comparyy be indifterent between closing the plant and keeping It open? (Hint This is a type of break-even analysis, except that the fixed-cost portion of your break-even computation shouldt include only those fixed costs that are relevant (i.e., awokdable) over the two-month period.)