Compute the break-even point in dollar sales

Reference no: EM131810887

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				Total
	White		Fragrant		Loonzain		Total
Percentage of total sales	48%		20%		32%		100%
Sales	374,400	100%	156,000	100%	249,600	100%	780,000	100%
Variable expenses	112,320	30%	124,800	80%	137,280	55%	374,400	48%
Contribution margin	262,080	70%	S 31,200	20%	S 112,320	45%	405,600	52%
Fixed expenses							233,480
Net operating income
Net operating income							S 172,120

Dollar sales to break even = Fixed expenses/ CM ratio = $233.480/ 0.52= $449,000

As shown by these data, net operating income is budgeted at $172,120 for the month and break even sales at $449,000.

Assume that actual sales for the month total $780,000 as planned. Actual sales by product are: White. $249,600: Fragrant, $312,000: and Loonzain, $218,400.

Required:

1. Prepare a contribution format income statement for the month based on actual sales data.

2. Compute the break-even point in dollar sales for the month based on your actual data.

Reference no: EM131810887

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