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.

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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