Requirement - 1:
Continue or Discontinue: For making decision about continuing or discontinuing a particular plant, we need to know the impact of that particular plant on the overall operating profits. So when overall operating profits are higher in case of continuing then that particular plant should be continue or vice versa.
To identify: Financial advantage (disadvantage) if Birch closes its own plant.
Requirement - 2:
To Explain: Should Birch close the plant for 2 months?
Requirement − 3:
Indifferent level: Indifferent level of units sold refers to the beak even level of units sold because at this level a company will be indifferent between closing the plant or keeping it open. In other words we can say that at this level a company will not get any financial advantage either on closing the plant or on keeping it open.
To identify: Indifferent level of units sold for closing the plant or keeping it open.
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Introduction To Managerial Accounting
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