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: Product Percentage of total sales White 48% Fragrant 20% Loonzain 32% Total 100% Sales Variable expenses $ 369,600 110,880 100% 30% $ 154,000 123,200 100% 80% Contribution margin Fixed expenses Net operating income $ 258,720 70% $ 30,800 20% $ 246,400 135,520 $ 110,880 100% 55% 45% $ 770,000 369,600 100% 48% 400,400 52% 226,720 $ 173,680 Dollar sales to break-even - Fixed expenses / CM ratio = $226,720/0.52 = $436,000 As shown by these data, net operating income is budgeted at $173,680 for the month and the estimated break-even sales is $436,000. Assume that actual sales for the month total $770,000 as planned; however, actual sales by product are: White, $246,400; Fragrant, $308,000; and Loonzain, $215,600. 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.

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: Product Percentage of total sales White 48% Fragrant 20% Loonzain 32% Total 100% Sales Variable expenses $ 369,600 110,880 100% 30% $ 154,000 123,200 100% 80% Contribution margin Fixed expenses Net operating income $ 258,720 70% $ 30,800 20% $ 246,400 135,520 $ 110,880 100% 55% 45% $ 770,000 369,600 100% 48% 400,400 52% 226,720 $ 173,680 Dollar sales to break-even - Fixed expenses / CM ratio = $226,720/0.52 = $436,000 As shown by these data, net operating income is budgeted at $173,680 for the month and the estimated break-even sales is $436,000. Assume that actual sales for the month total $770,000 as planned; however, actual sales by product are: White, $246,400; Fragrant, $308,000; and Loonzain, $215,600. 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.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter9: Profit Planning And Flexible Budgets

Section: Chapter Questions

Problem 50E: Use the following information for Exercises 9-50 and 9-51: Assume that Stillwater Designs produces...

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Gold Star Rice, Ltd., 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: ProductWhite Fragrant Loonzain TotalPercentage of total sales 48 % 20 % 32 % 100 % Sales $ 350,400 100 % $ 146,000 100 % $ 233,600 100 % $ 730,000 100 %Variable expenses 105,120 30 % 116,800 80 % 128,480 55 % 350,400 48 %Contribution margin $ 245,280 70 % $ 29,200 20 % $ 105,120 45 % 379,600 52 %Fixed expenses 225,680 Net operating income $ 153,920 Dollar sales to break-even = Fixed expenses = $225,680 = $434,000CM ratio 0.52 As shown by these data, net operating income is budgeted at $153,920 for the month and the estimated break-even sales is $434,000. Assume that actual sales for the month total $730,000 as planned. Actual sales by product are: White, $233,600; Fragrant, $292,000; and Loonzain, $204,400. Required: 1. Prepare a contribution format income…
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: Dollar sales to break-even = Fixed expenses ÷ CM ratio = $223,600 ÷ 0.52 = $430,000 As shown by these data, net operating income is budgeted at $145,600 for the month and the estimated break-even sales is $430,000. Assume that actual sales for the month total $710,000 as planned; however, actual sales by product are: White, $227,200; Fragrant, $284,000; and Loonzain, $198,800. Required: Prepare a contribution format income statement for the month based on the actual sales data. Compute the break-even point in dollar sales for the month based on your actual data.
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: Product White Fragrant Loonzain Total Percentage of total sales 48% 20% 32% 100% Sales $ 336,000 100% $ 140,000 100% $ 224,000 100% $ 700,000 100% Variable expenses 100,800 30% 112,000 80% 123,200 55% 336,000 48% Contribution margin $ 235,200 70% $ 28,000 20% $ 100,800 45% 364,000 52% Fixed expenses 230,880 Net operating income $ 133,120 Dollar sales to break-even = Fixed expenses / CM ratio = $230,880 / 0.52 = $444,000 As shown by these data, net operating income is budgeted at $133,120 for the month and the estimated break-even sales is $444,000. Assume that actual sales for the month total $700,000 as planned; however, actual sales by product are: White, $224,000; Fragrant, $280,000; and Loonzain,…
Gold Star Rice, Ltd., of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice—White, Fragrant, and Loonzain. Budgeted sales by product and in total for the coming month are shown below White ($) Fragrant ($) Loonzain ($) Percentage of total sales 20% 52% 28% Actual Sales 150,000 390,000 210,000 Variable expenses 108,000 78,000 84,000 Budgeted Sales 300,000 180,000 270,000 Fixed expenses 449,280 Requirements Prepare contribution format income statement for the month based on budgeted sales. Also calculate overall breakeven point in revenue. Prepare contribution format income statement for the month based on actual sales. Also calculate overall breakeven point in revenue using actual sales data. Explain why the results of (a) and (b) are different despite the fact that company’s total actual sales are same as of budgeted sales
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Capity Tea Products has an exclusive contract with British Distributors. Calamine and Capity are two brands of teas that are imported and sold to retail outlets. The following information is provided for the month of March: Actual Budget Сapty 4,100 lbs. $2.90 Calamine Calamine Сapty 3,300 lbs. $3.00 rk 3,870 lbs. $3.00 Sales in pounds Price per pound Variable cost per pound Contribution margin 4,400 lbs. $2.00 Test 1.2 2.3 1.00 1.50 $1.80 $0.60 $1.00 $1.50 Budgeted and actual fixed corporate - sustaining costs are $1,850 and $2,300, respectively. What is the contribution margin for the flexible budget? brrect: 0 O A. $10,020 B. $9,426 O C. $11,276 O D. $9,266
ToraBika corporation manufactures and sells a seasonal product that has peak sales in the third quarter. The following information concerns operations for year 2-the coming year and for the first two quarters of year 3: The company’s single product sells for Tk. 10 per unit. Budgeted unit sales for the next six quarters are as follows(all sales are credit sales): year 2 quarter Year 3 quarter 1 2 3 4 1 2 40,000 units 60,000 units 1,00,000 units 50,000 units 60,000 units 70,000 units Sales are collected in the following pattern: 65% in the quarter the sales are made, and the remaining 35% in the following quarter. On January 1, year 2, the company’s balance sheet showed tk. 63,000 in accounts receivable, all of which will be collected in the first quarter of the year. Bad debts are negligible and can be ignored. c. Raw materials purchased in the following patterns: Y2 y3 Q1 Q2 Q3 Q4 Q5 Q6…
Kiwenkira & Son Ltd makes and sells a single product marketed under the brand name Kiwetonic for the West African sub-region and has a total production capacity of 30,000 units per month. The budget for January 2020 contained the following information: Normal capacity (Units) 27,000 Variable costs per unit: Production (GH¢) 110 Selling and distribution (GH¢) 25 Fixed overheads: Production (GH¢) 756,000 Selling and administration (GH¢) 504,000 The actual operating data for January 2020 is as follows: Production 24,000 units Sales at GH¢250 per unit 22,000 units Opening inventory of finished goods 2,000 units During the month of January 2020, the variable factory overheads exceeded the budget by GH¢120,000. Required: a) Prepare profit statement for the month of January using: Marginal costing: and Absorption costing techniques b) Reconcile the difference in profits (if any), under the two techniques
The Tokyo Division of Toy King manufactures “Togo Toy” and sells them in the Japanese market for P6,000 each. The following data are from the Tokyo Division’s 2018 budget: Variable Cost P3,800 per unit Fixed Overhead P6,080,000 Total Assets P12,500,000 Toy King has instructed the Tokyo Division to budget a rate of return on total assets (before taxes) of 20%. The Tokyo Division is considering adjustments in the budget to reach the desired 20% rate of return on total assets: a. How many units must be sold to obtain the desired return if no other part of the budget is changed? b. Suppose sales cannot be increased beyond 3,400 units. How much must total assets be reduced to obtain the desired return? Assume that for every P1,000 decrease in total assets, fixed costs decrease by P100.
Kiwenkira & Son Ltd makes and sells a single product marketed under a brand name Kiwetonic for the West African sub region and has total production capacity of 30,000 units per month. The budget for January 2020 contained the following information: Normal capacity (Units) 27,000 Variable costs per unit: Production (GH¢) 110 Selling and distribution (GH¢) 25 Fixed overheads: Production (GH¢) 756,000 Selling and administration (GH¢) 504,000 The actual operating data for January 2020 is as follows: Production 24,000 units Sales at GH¢250 per unit 22,000 units Opening inventory of finished goods 2,000 units During the month of January 2020, the variable factory overheads exceeded the budget by GH¢120,000. Required: Prepare profit statement for the month of January using: Marginal costing: and Absorption costing techiques Reconcile the difference in profits (if any), under the two…
im Anderson Foods produces spécialty soup sold in jars. The projected sales in dollars and jars for each quarter of the upcoming year are as follows: Total sales Number of jars sold revenue 1st quarter.... S 182,000 150,000 2nd quarter... S 210,000 182,500 A 3rd quarter $ 257,000 213,000 4th quarter $ 197,000 162,000 Prepare the production budget by first calculating the total units needed, then calculate the units to produce. Anderson Foods Production Budget For the Quarters in the Upcoming Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Unit sales Plus: Desired ending inventory Total needed Less: Beginning inventory. Units to produce n HA CIES Anderson anticipates selling 223,000 jars with total sales revenue of $267,000 in the first quarter of the year following the year given in the preceding table. Anderson has a policy that the ending inventory of jars must be 25% of the following quarter's sales. Requirement Prepare a production budget for the year that shows the number of…
Follow the requirements.