Use the Graphical Approach to CVP Analysis to Solve the Following

question 10

Short Answer

Use the graphical approach to CVP analysis to solve the following problem.
Reflex Manufacturing Corp. manufactures borgels at a unit variable cost of $43. It sells them for $70 each. It can produce a maximum of 3,200 borgels per month. Annual fixed costs total $648,000.
a) What is the break-even volume per month?
b) What is the monthly net income at a volume of 2500 borgels per month?
c) What is the monthly net income if Reflex operates at 50% of capacity during a recession?

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