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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: White Percentage of total sales 48% Sales Variable expenses Product Fragrant Loonzain Contribution margin Fixed expenses $340,800 100% 102,240 30% $ 238,560 70% Total 20% $ 142,000 100% 113,600 32% $ 227,200 100% $710,000 100% 80% 124,960 55% 100% $ 28,400 20% $ 102,240 45% 340,800 48% 369,200 231,920 52% Net operating income Dollar sales to break-even = Fixed expenses / CM ratio = $231,920 / 0.52 = $446,000 As shown by these data, net operating income is budgeted at $137,280 for the month and the estimated break-even sales is $446,000. 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: 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. $ 137,280

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: White Percentage of total sales 48% Sales Variable expenses Product Fragrant Loonzain Contribution margin Fixed expenses $340,800 100% 102,240 30% $ 238,560 70% Total 20% $ 142,000 100% 113,600 32% $ 227,200 100% $710,000 100% 80% 124,960 55% 100% $ 28,400 20% $ 102,240 45% 340,800 48% 369,200 231,920 52% Net operating income Dollar sales to break-even = Fixed expenses / CM ratio = $231,920 / 0.52 = $446,000 As shown by these data, net operating income is budgeted at $137,280 for the month and the estimated break-even sales is $446,000. 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: 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. $ 137,280

FINANCIAL ACCOUNTING
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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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 Fragrant Loonzain White Percentage of total sales 48% Sales $ 340,800 100% Variable expenses Contribution margin $ 238,560 70% Fixed expenses 102,240 30% Total 20% $ 142,000 100% 113,600 80% $ 28,400 20% 32% $ 227,200 100% 124,960 55% $ 102,240 45% 100% $ 710,000 340,800 231,920 100% 369,200 52% $ 137,280 48% Net operating income Dollar sales to break-even = Fixed expenses / CM ratio = $231,920 / 0.52 = $446,000 As shown by these data, net operating income is budgeted at $137,280 for the month and the estimated break-even sales is $446,000. 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: 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.
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 Fragrant Loonzain White Percentage of total sales 48% Sales $ 340,800 100% Variable expenses Contribution margin $ 238,560 70% Fixed expenses 102,240 30% Total 20% $ 142,000 100% 113,600 80% $ 28,400 20% 32% $ 227,200 100% 124,960 55% $ 102,240 45% 100% $ 710,000 340,800 231,920 100% 369,200 52% $ 137,280 48% Net operating income Dollar sales to break-even = Fixed expenses / CM ratio = $231,920 / 0.52 = $446,000 As shown by these data, net operating income is budgeted at $137,280 for the month and the estimated break-even sales is $446,000. 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: 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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