Problem 11-24 Shutting Down or Continuing to Operate a Plant [LO11-2] Birch Company normally produces and sells 45,000 units of RG-6 each month. The selling price is $24 per unit, variable costs are $17 per unit, fixed manufacturing overhead costs total $175,000 per month, and fixed selling costs total $40,000 per month. Employment-contract strikes in the companies that purchase the bulk of the RG-6 units have caused Birch Companys sales to temporarily drop to only 11,000 units per month. Birch Company estimates that the strikes will last for two months, after which time sales of RG-6 should return to normal. Due to the current low level of sales, Birch Company is thinking about closing down its own plant during the strike, which would reduce its fixed manufacturing overhead costs by $44,000 per month and its fixed selling costs by 9%. Start-up costs at the end of the shutdown period would total $14,000. Because Birch Company uses Lean Production methods, no inventories are on hand.

Required: 1. What is the financial advantage (disadvantage) if 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?

I have gotten answer 2 correct, but on Answer 1 i know it is a disadvantage but I keep getting the number $364080 and it is not correct -- i need to know what I am doing wrong!

And on Answer 3, I keep getting $10560 and also have no idea what that is wrong!

So really I just need help with the calculations on 1 and 3.