Gold Star Rice, Limited, of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-White, Fragrant, and Loonzain. Budgeted sales by product and in total for the coming month are shown below: Percentage of total sales. Sales Variable expenses Contribution margin. Fixed expenses Net operating income White 48% $ 292,800 87,840 $ 204,960 Fragrant 20% 100% $ 122,000 30% 97,600 $ 24,400 70% Product 100% 80% 20% Loonzain 32% $ 195, 200 107,360 $ 87,840 100% 55% 45% Required: 1. Prepare a contribution format income statement for the month based on the actual sales data. 2. Compute the break-even point in dollar sales for the month based on your actual data. Total 100% $ 610,000 292,800 317, 200 226, 200 $ 91,000 100% 48% 52% Dollar sales to break-even = Fixed expenses + CM ratio = $226,200 ÷ 0.52 = $435,000 As shown by these data, net operating income is budgeted at $91,000 for the month and the estimated break-even sales is $435,000. Assume actual sales for the month total $610,000 as planned; however, actual sales by product are White, $195,200; Fragrant, $244,000; and Loonzain, $170,800.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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![Gold Star Rice, Limited, of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-White, Fragrant, and
Loonzain. Budgeted sales by product and in total for the coming month are shown below:
Percentage of total sales
Sales
Variable expenses
Contribution margin
Fixed expenses
Net operating income
White
48%
$ 292,800
87,840
$ 204,960
Fragrant
20%
100% $ 122,000
30% 97,600
70% $ 24,400
Product
Loonzain
32%
100% $ 195,200
80%
107,360
20%
$ 87,840
100%
55%
45%
Required:
1. Prepare a contribution format income statement for the month based on the actual sales data.
2. Compute the break-even point in dollar sales for the month based on your actual data.
Total
100%
$ 610,000
292,800
317, 200
226, 200
$ 91,000
100%
48%
52%
Dollar sales to break-even = Fixed expenses ÷ CM ratio = $226,200 ÷ 0.52 = $435,000
As shown by these data, net operating income is budgeted at $91,000 for the month and the estimated break-even sales is $435,000.
Assume actual sales for the month total $610,000 as planned; however, actual sales by product are White, $195,200; Fragrant,
$244,000; and Loonzain, $170,800.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fedaf4f9b-541c-441e-af8c-deaf3b4f51aa%2F4a556b37-0bb6-4bef-bcfe-7cc8721e6a14%2Fcgh5wuh_processed.jpeg&w=3840&q=75)
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