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-Fragrant, White, and Loonzain Budgeted sales by product and in total for the coming month are shown below Fragrant 20% 48% 32% 100% Percentage of total sales Sales Variable expenses $336,000 100% $140,000 100% $224,000 100% $700,000 100% 100,800 30% 112,000 80% 123,200 55% 336 000 48% $235.200 70% $28,000 20% $100,800 45% 364,000 52% Contribution margin Fixed expenses 30,880 Net operating income 133,120 230880 $444,000 Dollar sales to break evenFxed expenses data, not operating income is budgeted at $133,120 for the month and break even sales at $444 000 Assume that actual sales for the month total $700,000 as planned Actual sales by product are White 224.000. Fragrant $280,000, and Loonzain, $196 000 a contribution format income statement for the month based on actual sales data Gold Star Rice, Ltd. Contribution Income Statement DOLL F3 F4 F5 F6 F7 F10 F1 F12 3 5 6 7 9 0.

Explanation / Answer

Gold Star Rice, Ltd.

Contribution Income Statement

2.

Breakeven point in sales dollars = Fixed expenses / Contribution margin ratio

= 230,880 / 0.43

= 536,930

White White Fragant Fragant Loonzain Loonzain Total Total Percentage of total 32 % 40 % 28% % 100 % Sales 224,000 100% 280,000 100% 196,000 100% 700,000 100% Variable expenses 67,200 30% 224,000 80% 107,800 55% 399,000 57% Contribution margin 156,800 70% 56,000 20% 88,200 45% 301,000 43% Fixed expenses 230,880 Net operating income 70,120

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