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Show the steps please. Gama Company has a single product called a Xet. The company normally produces and sells 80,000 Xets each year. The company's
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Gama Company has a single product called a Xet. The company normally produces and sells 80,000 Xets each year. The company's unit costs at this level of activity are given below: One of the materials used in the production of Xets 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 three months. Gama Company has enough material on hand to operate at 40% of normal levels for the three-month period. As an alternative, the company could close the plant down entirely for the three months. Closing the plant would reduce fixed manufacturing overhead costs by 30% during the three-month period and the fixed selling expenses would continue at two-thirds of their normal level. What is the selling price per unit of Xet that would make the company indifferent between (i) closing the plant and (ii) not closing the plant for the three-month period? A $31.50 B $43.50 C $24.00 D $35.50 E None of the aboveStep by Step Solution
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