Gold Star Rice, Ltd., of Thailand exports Thai rice throughout Asia. The company
ID: 2581092 • Letter: G
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:
Product
Fixed expenses
$232,440
As shown by these data, net operating income is budgeted at $105,560 for the month and break even sales at $447,000.
Assume that actual sales for the month total $650,000 as planned. Actual sales by product are: White, $208,000; Fragrant, $260,000; and Loonzain, $182,000.
Prepare a contribution format income statement for the month based on actual sales data.
Compute the break-even point in dollar sales for the month based on your actual data. (Round your final answer to the nearest whole dollar.)
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:
Explanation / Answer
Prepare a contribution format income statement for the month based on actual sales data.
Compute the break-even point in dollar sales for the month based on your actual data
Break even point in dollars = FIxed cost/contribution margin ratio
= 232440/.43
Break even point in dollars = $540558
Gold Star Rice, Ltd. Contribution Income Statement Product White Fragrant Loonzain Total Percentage of total 32 % 40 % 28 % 100 % Sales 208000 100 % 260000 100 % 182000 100 % 650000 100 % Variable expenses 62400 30 % 208000 80% % 100100 55 % 370500 57 % Contribution margin 145600 70 % 52000 20 % 81900 45 % 279500 43 % Fixed expenses 232440 Net operating income 47060Related Questions
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