The following information relates to Axar Products for fiscal 2008, the company's first year of operation:

Required

a. Prepare an income statement using full costing.

b. Prepare an income statement using variable costing.

c. Using the variable costing income statement, calculate the company's break-even point in sales dollars and in units. Can the break-even point be easily calculated using the full costing income statement? Why or why not?

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Units produced Units sold Selling price per unit Direct material per unit Direct labor per unit Variable manufacturing overhead per unit Variable selling cost per unit Annual fixed manufacturing overhead Annual fixed selling and administrative expense 30,000 28,000 AAASA $ 23 $ 4 $ 3 $ 1 $ 2 $270,000 $ 75,000