M Marketing Final Pr Marketing Final Pr x \\ Top Hat x \\ G One of the primer Si
ID: 2529080 • Letter: M
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M Marketing Final Pr Marketing Final Pr x Top Hat x G One of the primer Sign In-Affinity p M My UND I UND: U , Connect X ? c https://n t.html?isReg true&returnUrl; https%3A%2F%2Fconnect.mh Findex.html%23%2Fregistration%2Fsi..? ? ? 0 Appssyllabus fine arts Ch. 12: Homework 6 Saved Help Save & Exit Submit 5 Check my work 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 (disntage) if Birch closes its own plant for two months? 2. Should Birch close 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 or keeping it open? points eBook Complete this question by entering your answers in the tabs below Print References Required Required 2Required 3 What is the financial advantage (disadvantage) if Birch closes its own plant for two months? Required 1 Required 2 Mc GrawExplanation / Answer
If the company shuts down:
Fixed manufacturing costs: $149000*2=$298000
Selling costs: $43200*2=$86400
Startup costs=$16000
Total loss: $400400
If company operates:
Contribution p.u =$10
Total contribution: 2*10000*$10=$200000
Less: fixed cost (190000+48000)*2=$476000
Loss: $276000
1. If birch closes its plant for two months it will be financially disadvantageous for Birch as it would incurr additional loss of $124400
2. No it shouldn't close down as even operating at this low level it is able to recover some fixed costs.
3. Indifferent position
Let x be units to be sold
$10x - $476000=$400400
$10x=$876400
X= 87640
Thus to be indifferent sales to be made for two month period is 87640 units
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