SIMPLE SOLUTIONS NEEDED

Chan Bags Corporations sells bags at a very affordable price. However, due to pandemic, there is a decreased demand for Bags. This can also be brought by lesser people going to malls to buy bags. With this, the Chan Bags thought of temporarily shutting down operations while demand is still low. They are looking at a 6-month pause of operations. The following are cost information about Chan Bags Corporation. During pandemic, the demand decreased to 10% from 10,000 Units (over 6 months). After pandemic, USP can be increased back to normal. Cost Component 350 280 80,000 Description Price of Bags Variable Cost (Materials, Labor) FC per Month Avoidable FC during Shutdown Additional Maintenance needed while Shutdown (over 6 months) Back to Operations Cost Sale/Discounted Price while Pandemic 30,000 20,000 75.000 10% USP Questions: 1. What is the Net Income (over 6 months) if Chan Bags will continue Operation? 2. What is the minimum number of bags Chan Bags must be sold (over 6 months) so that it will continue its operations? 2