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% $ 302,400. 90,720 $ 211,680 100% 30% 70% Fragrant 20% $ 126,000 100,800 $ 25,200 Product Loonzain 32% 100% $ 201,600 80% 110,880 20% $ 90,720. 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. 100% $630,000 55% 302,400 45% 327,600 233,480 $ 94,120 100% 48% 524 Dollar sales to break-even = Fixed expenses/CM ratio= $233,480/0.52 - $449,000 As shown by these data, net operating income is budgeted at $94,120 for the month and the estimated break-even sales is $449,000. Assume that actual sales for the month total $630,000 as planned; however, actual sales by product are: White, $201,600; Fragrant, $252,000, and Loonzain, $176,400.

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% $ 302,400. 90,720 $ 211,680 100% 30% 70% Fragrant 20% $ 126,000 100,800 $ 25,200 Product Loonzain 32% 100% $ 201,600 80% 110,880 20% $ 90,720. 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. 100% $630,000 55% 302,400 45% 327,600 233,480 $ 94,120 100% 48% 524 Dollar sales to break-even = Fixed expenses/CM ratio= $233,480/0.52 - $449,000 As shown by these data, net operating income is budgeted at $94,120 for the month and the estimated break-even sales is $449,000. Assume that actual sales for the month total $630,000 as planned; however, actual sales by product are: White, $201,600; Fragrant, $252,000, and Loonzain, $176,400.

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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Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information: ● Quarter 1 Quarter 2 Quarter 3 Quarter 4 38,000 58,000 29,000 58,000 Budgeted unit sales Each T-shirt is expected to sell for $13. The purchasing manager buys the T-shirts for $5 each. The company needs to have enough T-shirts on hand at the end of each quarter to fill 23 percent of the next quarter's sales demand. Selling and administrative expenses are budgeted at $76,000 per quarter plus 18 percent of total sales revenue. Required: 1. Determine budgeted sales revenue for each quarter. 2. Determine budgeted cost of merchandise purchased for each quarter. 3. Determine budgeted cost of good sold for each quarter. 4. Determine selling and administrative expense for each quarter. 5. Complete the budgeted income statement for each quarter.
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