Ovation Company has a single product called a Bit. The company normally produces and sells $69,600$ Bits each year at a selling price of $$49$ per unit. The company$$s unit costs at this level of activity are given below:

Direct materials $ $9\mathrm{.}90$

Direct labour $8\mathrm{.}10$

Variable manufacturing overhead $4\mathrm{.}20$

Fixed manufacturing overhead $3\mathrm{.}00($$$208,800$ total$)$

Variable selling expenses $7\mathrm{.}20$

Fixed selling expenses $3\mathrm{.}60($$$250,560$ total$)$

Total cost per unit $ $36\mathrm{.}00$

Answer Question Please$)$

$1.)$ Due to a strike in its supplier's plant, Ovation Company is unable to purchase more material for the production of Bits. The strike is

expected to last for two months. Ovation Company has enough material on hand to operate at $30\%$ of normal levels for the two$-$month period. As an alternative, Ovation could close its plant down entirely for the two months. If the plant were closed, fixed overhead costs would continue at $60\%$ of their normal level during the two$-$month period and the fixed selling expenses would be

reduced by $20\%.$ What would be the impact on profits of closing the plant for the two$-$month period? $($input the amount as a positive

value. Do not round your Intermedlate calculatlons.$)$

Net disadvantage of closing the plant: $\_\_\_\_\_\_\_\_$

$2.)$An outside manufacturer has offered to produce Bits and ship them directly to Ovation's customers. If Ovation Company accepts

this offer, the facilities that it uses to produce Bits would be idle; however, fixed manufacturing overhead costs would be reduced by

$75\%.$ Since the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two$-$thirds of their

current amount. Compute the unit cost that is relevant for comparison to the price quoted by the outside manufacturer. $($Do not round

your Intermedilate calculatlons. Round your answer to $2$ decimal places.$)$

Total avoidable unit cost: $\_\_\_\_\_\_$