Gold Star Rice, Ltd., of Thaland exports That rice throughout Asia. The company

Question

Gold Star Rice, Ltd., of Thaland exports That rice throughout Asia. The company grows three varieties of rice White, Fragrant, and Loonzaln. Budgeted sales by product and in total for the coming month are shown below Product white 48 % Fragrant 20% Loonzain 32% Total 100 % Percentage of total sales Sales Variable expenses Contribution margin Fixed expenses Net operating income $364,800 100 % $152,000 100 % $243,200 100 % $760,000 100 % 109,448 30 % 121,600 80 % 13,768 55 % 364,888 48 % $255,360 70 %$30,400 20 % $109,440 45 % 395,200 52 % 226,200 $169,000 Fixed expenses $226,200 Dollar sales to break- even 0.52 $435,009 CM ratio As shown by these data, net operating income is budgeted at $169,000 for the month and the estimated break-even sales is $435,000 Assume that actual sales for the month total $760,000 as planned Actual sales by product are: White, $243.200; Fragrant $304.000 and Loonzain, $212,800 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

Explanation / Answer

Req 1 CONTRIBUTION MARGIN STATEMENT WHITE FRAGRANT LOONZAIN TOTAL AMOUNT % AMOUNT % AMOUNT % AMOUNT % Percentage of Total sales 32% 40% 28% 100% Sales revenue 243200 100.00% 304000 100% 212800 100% 760000 100% Less: variable expense 72,960 30% 243200 80% 117040 55% 433,200 57% Contribution margin 170,240 70% 60800 20% 95760 45% 326,800 43% Less: Fixed expensse 226200 Net icnome 100,600 Req 2: Break even sales in $: Fixed cost / Weighted Average CM ratio = $226,200 /43% = $526,047

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