Gold Star Rice, Ltd., of Thailand exports Thai rice throughout Asia. The company

Question

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 48 % Fragrant 20 % Total 100 % Loonzain Percentage of total sales Sales Variable expenses Contribution margin Fixed expenses Net operating income 32 100% $214,400 117,920 20% $ 96,480 100% $670,000 321,600 348,400 228,800 119,600 $321,600 96,480 $ 225,120 100% $134,000 107,200 70% $ 26,800 100% 48 % 52 % 30 % 55 % 45 % 80 % Fixed expenses CM ratio $228,800$440,000 Dollar sales to break-even - 0.52 As shown by these data, net operating income is budgeted at $119,600 for the month and the estimated break-even sales is $440,000 Assume that actual sales for the month total $670,000 as planned. Actual sales by product are: White, $214,400; Fragrant, $268,000; and Loonzain, $187,600 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

Explanation / Answer

White Fragrant Loonzain Total Percentage of total sales 32% 40% 28% 100% Sales 214400 100% 268000 100% 187600 100% 670000 100% Variable expenses 64320 30% 214400 80% 103180 55% 381900 57% Contrinution margin 150080 70% 53600 20% 84420 45% 288100 43% Fixed expenses 228800 Net operating income 59300 2 Break even point = 228800/43%= $532093

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