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provide me the correct answer or else i will downgrade you. (Note: This type of decision is simitar to dropping a product line) Nicholas Company

provide me the correct answer or else i will downgrade you.
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(Note: This type of decision is simitar to dropping a product line) Nicholas Company manufactures a fast-bonding glue, normally producing and selling 50,000 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 MJ7 is $25 per litre, variable costs are $15 per litre, fixed manuticturing overhead costs in the plant total $287,500 per month, and the fixed selting costs total $385.000 per month. Strikes in the milis thot purchase the bulk of the Mu7 glue have caused Nicholas Company's sales to temporarly drop to only 12500 litres per month. Nicholas Companys management estimates that the strikes will fast for two months. atter which sales of Mu-7 should return to normat. Due to the current low level of sales. Nicholas Company's management is thinking about closing down the plant during the strke. If Nicholas Company does ciose down the plant, fixed manufacturing overhead costs can be reduced by $/5,000 per month and tived selling costs can be reduced by 10%. Start-up costs at the end of the shutdown period would todal \$17.000. Sirce Nicholas Company uses lean production methods, no inventories are on hand. Requirect: 1-0. Assuming that the strikes continue for two months, compute the increase of decrease in income from dosing the plant 1-b. Would you recommend that Nicholas Company close its own plant? 1-b. Would you recommend that Nicholas Company close its own plant? No Yes 2. At what level of sales (in litres) for the two-month period should Nicholas Company be indifferent 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 should include only those fixed costs that are relevant (i.e, avoidable) over the two-month period)

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