Please help with the one that is wrong! Thank You (Note: This type of decision is similar to dropping a product line.) Nicholas Company manufactures a fast-bonding glue, normallyproducing and selling 64,000 litres of the glue each month. This glue, which is known as MJ-7, is used in the wood industry tomanufacture plywood. The selling price of MJ-7 is $50 per litre, variable costs are $30 per litre, fixed manufacturing overhead costs inthe plant total $368,000 per month, and the fixed selling costs total $492,800 per month.Strikes in the mills that purchase the bulk of the MJ-7 glue have caused Nicholas Company's sales to temporarily drop to only16,000 litres per month. Nicholas Company's management estimates that the strikes will last for two months, after which sales of MJ-7should return to normal. Due to the current low level of sales, Nicholas Company's management is thinking about closing down theplant during the strike.If Nicholas Company does close down the plant, fixed manufacturing overhead costs can be reduced by $96,000 per month andfixed selling costs can be reduced by 10%. Start-up costs at the end of the shutdown period would total $10,560. Since NicholasCompany uses lean production methods, no inventories are on hand.Required:1-a. Assuming that the strikes continue for two months, compute the increase or decrease in income from closing the plant.Answer is complete and correct.in twomonthsNetdecrease V byincome is(360,000) 1-b. Would you recommend that Nicholas Company close its own plant?YesO No O2. At what level of sales (in litres) for the two-month period should Nicholas Company be indifferent between closing the plant andkeeping it open? (Hint: This is a type of break-even analysis, except that the fixed-cost portion of your break-even computation shouldinclude only those fixed costs that are relevant (i.e., avoidable) over the two-month period.)* Answer is complete but not entirely correct.Level oflitres in two7,000 Xsalesmonths

Shut down point(number of units) = =Avoidable fixed cost/Contribution per unit

.At what level of sales (in litres) for the two-month period should Nicholas Company be indifferent between closing the plant and eeping it open? (Hint: This is a type of break-even analysis, except that the fixed-cost portion of your break-even computation should clude only those fixed costs that are relevant (i.e., avoidable) over the two-month period.) Answer is complete but not entirely correct. Level of sales 7,000 X litres in two months

.At what level of sales (in litres) for the two-month period should Nicholas Company be indifferent between closing the plant and eeping it open? (Hint: This is a type of break-even analysis, except that the fixed-cost portion of your break-even computation should clude only those fixed costs that are relevant (i.e., avoidable) over the two-month period.) Answer is complete but not entirely correct. Level of sales 7,000 X litres in two months

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Oh no! Our expert couldn't answer your question. Don't worry! We won't leave you hanging. Plus, we're giving you back one question for the inconvenience. Here's what the expert had to say: Hi and thanks for your question! It looks like you're asking for help with using the site. You can reach our support team at the Contact Bartleby link at the bottom of the page. We've credited a question back to your account. Apologies for the inconvenience. Ask Your Question Again 13 of 30 questions left until Nov 14, 2021 Question complete a horizontal analysis for brown company. (negative answers should be indicated by a minus sign. leave no cells blank - be certain to enter "0" wherever required. round the "percent" answers to the nearest hundredth percent.) Current assets: 2020 2019 Increase (decrease) amount? Percent? Cash $14,150 $9,300 ?? Accounts receivable 16,950 12,800 ?? Merchandise inventory 18,050 21,450 ?? Prepaid advertising 52,600…