Gold Star Rice, Limited, of Thailand exports Thal 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 $ 350,400 105,120 100% 30% $ 146,000 116,800 Contribution margin Fixed expenses Net operating income $ 245,280 70% $ 29,200 20% 100% $ 233,600 80% 128,480 $ 105,120 100% 55% $ 730,000 350,400 100% 48% 45% 379,600 52% 232,440 $ 147,160 Dollar sales to break-even = Fixed expenses + CM ratio = $232,440 +0.52 = $447,000 As shown by these data, net operating Income is budgeted at $147,160 for the month and the estimated break-even sales is $447,000. Assume actual sales for the month total $730,000 as planned; however, actual sales by product are White, $233,600, Fragrant, $292,000; and Loonzain, $204,400. 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 Thal 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 $ 350,400 105,120 100% 30% $ 146,000 116,800 Contribution margin Fixed expenses Net operating income $ 245,280 70% $ 29,200 20% 100% $ 233,600 80% 128,480 $ 105,120 100% 55% $ 730,000 350,400 100% 48% 45% 379,600 52% 232,440 $ 147,160 Dollar sales to break-even = Fixed expenses + CM ratio = $232,440 +0.52 = $447,000 As shown by these data, net operating Income is budgeted at $147,160 for the month and the estimated break-even sales is $447,000. Assume actual sales for the month total $730,000 as planned; however, actual sales by product are White, $233,600, Fragrant, $292,000; and Loonzain, $204,400. 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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A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
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A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Gold Star Rice, Limited, of Thailand exports Thal 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
$ 350,400
105,120
100%
30%
$ 146,000
116,800
100x
80%
$ 233,600
128,480
100%
55%
$ 730,000
350,400
100%
48%
Contribution margin
Fixed expenses
Net operating income
$ 245,280
70%
$ 29,200
20%
$ 105,120
45%
379,600
52%
232,440
$ 147,160
Dollar sales to break-even Fixed expenses CM ratio $232,440+ 0.52 $447,000
As shown by these data, net operating Income is budgeted at $147,160 for the month and the estimated break-even sales is $447,000.
Assume actual sales for the month total $730,000 as planned; however, actual sales by product are White, $233,600; Fragrant,
$292,000; and Loonzain, $204,400.
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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