A manufacturer of major appliances provided the following information: the capacity of the facility is 900 units per month, the fixed costs are $175,000 per month, and the variable costs are $360 per unit. The product currently sells for $640.

a. What is the break-even volume as a percent of capacity?

b. If the variable costs decreased by $20 per unit, what would be the net income per month at capacity?

AppendixLO1