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 % $350,400 100 % $146,000 100 % $233,600 100 % $730,000 100 % 48 % 52 % 30 % 70 % 55 % 45 % 350,400 379,600 230,880 $148,720 105,120 116,800 80% 128,480 $ 245,280 $. 29,200 20 % 105,120 $230,880 0.52 rixed expenses Dollar sales to break-even- -$444,000 CM ratio As shown by these data, net operating income is budgeted at $148,720 for the month and the estimated break-even sales is $444,000 Assume that actual sales for the month total $730,000 as planned. 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 Complete this question by entering your answers in the tabs below.

Explanation / Answer

Gols Star Rice, Ltd.

Contribution Income Statement

2.

Dollar sales to Breakeven = Fixed costs / Contribution margin ratio

= 230,880 / 0.43

= 536,930

White White Fragrant Fragrant Loonzain Loonzain Total Total Percentage of total sales 32 % 40 % 28 % 100 % Sales 233,600 100% 292,000 100% 204,400 100% 730,000 100% Variable expenses 70,080 30% 233,600 80% 112,420 55% 416,100 57% Contribution margin 163,520 70% 58,400 20% 91,980 45% 313,900 43% Fixed expenses 230,880 Net operating income 83,020

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