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Problem Ii. CONTINUE DR SHUT DOW OPERATIONS. Eeng Company produces burglar alarms. The company's normal capacity is Elli-DID units per year. It produces and sells

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Problem Ii. CONTINUE DR SHUT DOW OPERATIONS. Eeng Company produces burglar alarms. The company's normal capacity is Elli-DID units per year. It produces and sells 2t],t]t]tl units each year at a selling price of PIE-[II per uniL The company's unit costs at this level of activity are given below: FEE-GU Due of the materials used in the production of burglar alarms is obtained from a foreign supplier. Civil unrest in the supplier's country has caused a cutoff in material shipments that is expected to last for six months. Eeng Company has enough of the material on hand to continue to operate at 2111396 of normal levels for the sixmonth period. As an alternative, the company could close the plant down entirely for six months. Closing the plant would reduce ned overhead costs by ED% during the sixmonth period; the xed selling costs would continue at 60% of their normal level while the plant was closed. However, additional shutdown costs of P9, would be incurred during the shutdown period for security and maintenance. REQUIRED: l. 1What would be the peso advantage or disadvantage of closing the during the sixmonth period? (15,000 ADvANIAGEj 2. Compute the stmtdown point in units. {11631.32}

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