**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:| Product | White | Fragrant | Loonzain | Total ||--------------------|-------------|------------|-----------|-----------|| Percentage of total sales | 48% | 20% | 32% | 100% || Sales | $302,400 | $126,000 | $201,600 | $630,000 || Variable expenses | $90,720 | $100,800 | $110,880 | $302,400 || | 30% | 80% | 55% | 48% || Contribution margin| $211,680 | $25,200 | $90,720 | $327,600 || | 70% | 20% | 45% | 52% |- **Fixed expenses:** $232,440- **Net operating income:** $95,160Equation used:\[ \text{Dollar sales to break-even} = \frac{\text{Fixed expenses}}{\text{CM ratio}} = \frac{\$232,440}{0.52} = \$447,000 \]As shown by these data, net operating income is budgeted at $95,160 for the month and the estimated break-even sales is $447,000.Assume that actual sales for the month total $630,000 as planned. Actual sales by product are:- White: $201,600- Fragrant: $252,000- Loonzain: $176,400**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.

Cost volume profit analysis is the technique used by management for decision-making. The methods…

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: Percentage of total sales Sales Variable expenses Contribution margin Fixed expenses Net operating income Dollar sales to break-even White 48 % $ 302,400 90,720 $ 211,680 Fixed expenses CM ratio 100 % 30 % 70 % $ $ 126,000 100,800 25, 200 Fragrant 20 % $232,440 0.52 Product 100 % 80 % 20 % = $447,000 Loonzain 32% $ 201,600 110,880 90,720 $ 100 % 55 % 45 % 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. Total 100 % $ 630,000 302,400 327,600 232,440 $ 95,160 100 % 48 % 52% As shown by these data, net operating income is budgeted at $95,160 for the month and the estimated break-even sales is $447,000. Assume that actual sales for the month total $630,000 as planned. Actual sales by product are: White, $201,600; Fragrant, $252,000; and Loonzain, $176,400.

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: Percentage of total sales Sales Variable expenses Contribution margin Fixed expenses Net operating income Dollar sales to break-even White 48 % $ 302,400 90,720 $ 211,680 Fixed expenses CM ratio 100 % 30 % 70 % $ $ 126,000 100,800 25, 200 Fragrant 20 % $232,440 0.52 Product 100 % 80 % 20 % = $447,000 Loonzain 32% $ 201,600 110,880 90,720 $ 100 % 55 % 45 % 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. Total 100 % $ 630,000 302,400 327,600 232,440 $ 95,160 100 % 48 % 52% As shown by these data, net operating income is budgeted at $95,160 for the month and the estimated break-even sales is $447,000. Assume that actual sales for the month total $630,000 as planned. 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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