Problem 2-21 (Algo) Sales Mix; Multiproduct Break-Even Analysis [LO2-9] 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 Percentage of total sales White 48% $ 340,800 102,240 $ 238,560 $ White % 0 100% $ 142,000 30% 113,600 70% $ 28,400 Fragrant 20% Prepare a contribution format income statement for the month based on the actual sales data. Gold Star Rice, Limited Contribution Income Statement % % 0% $ Fixed expenses Net operating income Dollar sales to break-even = Fixed expenses + CM ratio = $223,600+ 0.52 = $430,000 As shown by these data, net operating income is budgeted at $145,600 for the month and the estimated break-even sales is $430,000. Product 100% 80% 20% Fragrant % 0 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. Loonzain 32% $ 227,200 124,960 $ 102,240 % % 0% Product $ 100% 55% 45% Loonzain % 0 $ 710,000 340,800 369,200 Total 100% 223,600 $ 145,600 % % 0% $ 100% 48% 52% Total 0 0 % % 0%

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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Required:

Prepare a contribution format income statement for the month based on the actual sales data.
Compute the break-even point in dollar sales for the month based on your actual data.

Problem 2-21 (Algo) Sales Mix; Multiproduct Break-Even Analysis [LO2-9]
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
$ 340,800
102,240
$ 238,560
Percentage of total sales
White
48%
$
100%
30%
70%
White
0
%
Fragrant
20%
$ 142,000
113,600
$ 28,400
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.
Fixed expenses
Net operating income
Dollar sales to break-even = Fixed expenses + CM ratio = $223,600+ 0.52 = $430,000
As shown by these data, net operating income is budgeted at $145,600 for the month and the estimated break-even sales is
$430,000.
Prepare a contribution format income statement for the month based on the actual sales data.
Gold Star Rice, Limited
Contribution Income Statement
Product
%
%
0% $
Product
100%
80%
20%
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.
Fragrant
%
0
Loonzain
32%
$ 227,200
124,960
$ 102,240
%
0% $
100%
55%
45%
Loonzain
%
0
$ 710,000
340,800
369,200
223,600
$ 145,600
Total
100%
%
0%
$
100%
48%
52%
Total
0
0
%
%
0%

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