Pittsburg Tar Co. had the following income statement for 2010:

a. Compute the break-even point using the equation approach.
b. Prepare a CVP graph to reflect the relationships among cost, revenue, profit, and volume.
c. Prepare a profit-volume graph.
d. Prepare a short explanation for company management about each of the graphs.
e. Prepare an income statement at break-even point using variablecosting.

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Sales (30,000 gallons x $8) Variable cost $240,000 Production (40,000 gallons x $3) Selling (30,000 gallons x S $120,000 5,000 (135,000) $105,000 Contribution margin Fixed cost Production 46,000 Selling and administrative Income before tax Income tax (40%) Net income 200 (52,200 S 52,800 (21,120) 31,680