Reference no: EM132586778
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:
Product White Fragrant Loonzain Total
Percentage of total sales 20% 52% 28% 100%
Sales $150,000 100% $390,000 100% $210,000 100% 750,000 100%
Variable expenses 108,000 72% 78,000 20% 84,000 40% 270,000 36%
Contribution margin $42,000 28% $312,000 80% $126,000 60% 480,000 64%
Fixed expenses 449,280
Net operating income $30,720
Dollar sales to break-even=Fixed expenses=$449,280= $702,000CM ratio0.64
As shown by these data, net operating income is budgeted at $30,720 for the month and the estimated break-even sales is $702,000.
Assume that actual sales for the month total $750,000 as planned. Actual sales by product are: White, $300,000; Fragrant, $180,000; and Loonzain, $270,000.
Required:
Question 1. Prepare contribution format income statement for the month based on the actual sales data.
Question 2. Compute the break-even point in dollar sales for the month based on your actual data.
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