Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gold Star Rice, Ltd., of Thailand exports Thai rice throughout Asia. The company grows three varieties of riceWhite, Fragrant, and Loonzain. Budgeted sales by product

Gold Star Rice, Ltd., of Thailand exports Thai rice throughout Asia. The company grows three varieties of riceWhite, 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 48 % 20 % 32 % 100 %
Sales $ 288,000 100 % $ 120,000 100 % $ 192,000 100 % $ 600,000 100 %
Variable expenses 86,400 30 % 96,000 80 % 105,600 55 % 288,000 48 %
Contribution margin $ 201,600 70 % $ 24,000 20 % $ 86,400 45 % 312,000 52 %
Fixed expenses 224,120
Net operating income $ 87,880

Dollar sales to break-even = Fixed expenses = $224,120 = $431,000
CM ratio 0.52

As shown by these data, net operating income is budgeted at $87,880 for the month and the estimated break-even sales is $431,000.

Assume that actual sales for the month total $600,000 as planned. Actual sales by product are: White, $192,000; Fragrant, $240,000; and Loonzain, $168,000.

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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting For MBAs

Authors: Peter D. Easton, John J. Wild, Robert F. Halsey, Mary Lea McAnally

4th Edition

9781934319345

More Books

Students also viewed these Accounting questions

Question

What do you see as your biggest strength/weakness?

Answered: 1 week ago