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. White Fragrant Loontain Total 10 $ 100% Percentage of total sales Sales Variable expenses Contribution margin Fixed expenses Net operating income 350,400 105, 120 3 245, 280 $ 1 $ 146,000 16. 29, 200 100% E 200 $ 233,680 128,488 $ 105,120 100% 552 45% $ 78 $ 730,000 350.400 379,600 229,320 $ 150, 280 Dollar sales to break-even Fixed expenses CH ratio $229,320 - = $441,000 0.52 As shown by these data, net operating income is budgeted at $150,280 for the month and the estimated break-even sales is $441,000. 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

Answer 1

Contribution Margin Income Statement Products Total Total white Fragrant Loonzain Percentage of Total Sales Sale Variabel Expenses Contribution Margin 32% 40% 28% 100% 292000 100% 204400 100% 233600 100% 730000 100.0% 30% 233600 80% 112420 57.0% 70080 55% 416100 58400 20% 9198045% 163520 70% 43.0% 313900 Fixed Cost 229320 Net operating Income 84580 Break Even in Dollar Sales 533302 = Fixed Cost/ CM Ratio = (229320/0.43)