Problem 8. Shut down or continue operations. WOW Company produces and sells 140,000 units monthly except for the months of July and August when the number of units sold normally decline to 10,000 units per month. Management contemplates of temporarily shutting down operations in the months of July and August with the belief that the business will be spared of more losses during the period. If the business temporarily shuts down, security and maintenance amounting to P220,000 per month would still be incurred. Restarting the operations will cost the business P300,000 for mobilization and other costs. The business incurs a total of P24 million annual fixed costs allocated evenly over a 12-month period. This fixed cost is expected to drop by 60% during the months the operations are shut down. Other sales and costs data are as follows: Unit sales price P Unit variable production costs Unit variable expenses 300 140 40 unit contribution margin = Required: 1. How much is the total shutdown cost? 2. What is the shutdown point? 3. Should the business continue or shut down?