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% $ 374,400 112,320 $ 262,080 Fragrant 20% 100% $ 156,000 30% 124,800 70% $ 31,200 Product Loonzain 32% 100% $ 249,600 80% 137, 280 20% $ 112,320 100% 55% 45% Total 100% 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. $ 780,000 374,400 405,600 228,800 $ 176,800 Dollar sales to break-even = Fixed expenses + CM ratio = $228,800 ÷ 0.52 = $440,000 As shown by these data, net operating income is budgeted at $176,800 for the month and the estimated break-even sales is $440,000. Assume actual sales for the month total $780,000 as planned; however, actual sales by product are White, $249,600; Fragrant, $312,000; and Loonzain, $218,400. 100% 48% 52%

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% $ 374,400 112,320 $ 262,080 Fragrant 20% 100% $ 156,000 30% 124,800 70% $ 31,200 Product Loonzain 32% 100% $ 249,600 80% 137, 280 20% $ 112,320 100% 55% 45% Total 100% 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. $ 780,000 374,400 405,600 228,800 $ 176,800 Dollar sales to break-even = Fixed expenses + CM ratio = $228,800 ÷ 0.52 = $440,000 As shown by these data, net operating income is budgeted at $176,800 for the month and the estimated break-even sales is $440,000. Assume actual sales for the month total $780,000 as planned; however, actual sales by product are White, $249,600; Fragrant, $312,000; and Loonzain, $218,400. 100% 48% 52%

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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