Using break-even analysis}

A new product is expected to have sales of \(\$ 100,000\), variable costs that are \(60 \%\) of sales, and fixed costs of \(\$ 20,000\).

1. Using graph paper, construct a break-even chart and label the sales line, total cost line, fixed cost line, break-even point, and net income and net loss areas.

2. From the chart, identify the break-even point and the amount of income or loss if sales are \(\$ 100,000\).