What are the answers to Required 1 and 2? Birch Company normally produces and sells 48,000 units of RG-6 each month. The selling price is $30 perunit, variable costs are $10 per unit, fixed manufacturing overhead costs total $170,000 per month, and fixedselling costs total $36,000 per month.Employment-contract strikes in the companies that purchase the bulk of the RG-6 units have caused BirchCompany's sales to temporarily drop to only 11,000 units per month. Birch Company estimates that thestrikes will last for two months, after which time sales of RG-6 should return to normal. Due to the currentlow level of sales, Birch Company is thinking about closing down its own plant during the strike, whichwould reduce its fixed manufacturing overhead costs by $49,000 per month and its fixed selling costs by10%. Start-up costs at the end of the shutdown period would total $15,000. Because Birch Company usesLean Production methods, no inventories are on hand.Required:1. What is the financial advantage (disadvantage) if Birch closes its own plant for two months?Financial (disadvantage) I2. At what level of unit sales for the two-month period would Birch Company be indifferent betweenclosing the plant or keeping it open?Unit sales required for Birch to be indifferent

A "fixed cost" is a cost that does not change as the quantity of goods or services produced or sold…

Answered: What are the answers to Required 1 and…

Business

Accounting

What are the answers to Required 1 and 2?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....

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