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Birch Company normally produces and sells 48.000 units of RG-6 each month. The selling price is $20 per untt variable costs are $10 per unit, fixed manufacturing overhead costs total $180.000 per month, and fixed selling costs fotal $44,000 per month. Employment-contract strikes in the companies that purchase the bulk of the RG.6 units have caused Birch Company's sales to temporarily drp to only 12,000 units per month. Barch Company estimates that the strikes will last for two monthis, after which time sales of RG.6 should retuin to normal. Due to the current low level of sales. Birch Company is thinking about closing down its own plant during the strike, which would reduce its fixed manufacturing overhead costs by $46,000 per month and its fixed seling costs by 10%. Start-up costs at the end of the shutdown period would total $16,000. Because Birch Company uses Lean Production methods. no inventories are on hand Required: 1. What is the financial advantage (disadvantage) if Birch closes its own plant for two months? 2. Should Birch ciose the plant for two months? 3 At what level of unit sales for the two-month period would Birch Company be indifferent between closing the plant of keeping it open? Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) if Birch closes its own plant for two months? Birch Company normally produces and sells. 48,000 units of RG-6 each month. The selin) price is 520 per unit, variable costs are $10 per unit, fixed manufacturing overhead costs total $180.000 per month, and fixed selling costs total $44000 per month Employment-contract strikes in the comparies that purchase the bulk of the RG. 6 units have caused Birch Compary's sales to temporarily diop to only 12,000 units per month, Birch Company estimates that the strikes will last for two months, after which time sales of RG.6 should retum to normah. Due to the current low level of sales, Birch Compary is thinking about closing down its own plant during the strike; which would reduce its fixed manufacturing overhead costs by $46.000 per month and its foxed selimg costs by 10% Start-up costs at the end of the shutdown period would total St 6,000 , Because Birch Compony uses Lean Production methods, no inventorics are on hand Required: 1. What is the financial advantage (disadvantage) if Birch eloses its own plant for fwo months? 2. Should Birch close the plant for two months? 3. At what teve of unit sales for the two-month period would Bitch Company be indaterent between closing the plant or keeping a open? Complete this question by sntering your answers in the tabs bedow. Should Birch close the plant for two monthe? Birch Compary normally produces and sells 48,000 units of RG-6 each month The selling price is $20 per unit, vatiable costs are $10 per unit, fixed manufacturing overtiead costs total $180,000 per month, and fixed selling costs total $44000 per month Employment-contract strikes in the companies that purchase the bolk of the RG-6 units have caused Birch Companty's sales to temporarily drop to only 12.000 units per month. Birch Compary estimates that the strikes wilt last for fwo months after which time sales of RG-6 should retum to nomal. Due to the current low level of sales, Birch Company is thinking about closing down its own plant during the strike, which would reduce its fioed manufocturing overhead costs by \$46.000 per month and its fixed selimg costs by 10%. Start-up costs at the end of the shutdown petiod would total $16,000. Becouse Birch Compony uses Lean Production methods. no inventories are on hand Required: 1. What is the financial advantage folsadvantage) if Birch closes its own plant for two months? 2. Should Birch close the plant for two months? 3. A what level of una sales for the two-month period would Birch Company be indifferent between closing the plant of keeping it open? Complete this question by entering your answers in the taks thdow. At what level of unit sates for the two menth-period would Birch Comnpary be indiferent hetween closing the plant or keepine it open

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