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 Sales White 48% Fragrant 20% Loonzain 32% Total 100% Variable expenses $ 379,200 113,760 30% 100% $ 158,000 126,400 100% 80% $ 252,800 139,040 100% 55% $ 790,000 379,200 100% 48% Contribution margin Fixed expenses Net operating income $ 265,440 70% $ 31,600 20% $ 113,760 45% 410,800 52% 226,720 $ 184,080 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 $184,080 for the month and the estimated break-even sales is $436,000. Assume actual sales for the month total $790,000 as planned; however, actual sales by product are White, $252,800; Fragrant, $316,000; and Loonzain, $221,200. 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 Sales White 48% Fragrant 20% Loonzain 32% Total 100% Variable expenses $ 379,200 113,760 30% 100% $ 158,000 126,400 100% 80% $ 252,800 139,040 100% 55% $ 790,000 379,200 100% 48% Contribution margin Fixed expenses Net operating income $ 265,440 70% $ 31,600 20% $ 113,760 45% 410,800 52% 226,720 $ 184,080 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 $184,080 for the month and the estimated break-even sales is $436,000. Assume actual sales for the month total $790,000 as planned; however, actual sales by product are White, $252,800; Fragrant, $316,000; and Loonzain, $221,200. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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
Sales
White
48%
Fragrant
20%
Loonzain
32%
Total
100%
Variable expenses
$ 379,200
113,760
30%
100% $ 158,000
126,400
100%
80%
$ 252,800
139,040
100%
55%
$ 790,000
379,200
100%
48%
Contribution margin
Fixed expenses
Net operating income
$ 265,440
70% $ 31,600
20%
$ 113,760
45%
410,800
52%
226,720
$ 184,080
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 $184,080 for the month and the estimated break-even sales is
$436,000.
Assume actual sales for the month total $790,000 as planned; however, actual sales by product are White, $252,800; Fragrant,
$316,000; and Loonzain, $221,200.
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.
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