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 Frag Loonzain

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 J2% 78,000 22% 84,000 40% 270,000

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

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

the format shown above.

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

3. Considering the fact that the company met its $750,000 sales budget for the month, the president is shocked at the results

shown on your income statement in (1) above. Prepare a brief memo for the president explaining why the net operating income

(loss) and the break-even point in dollar sales are different from what was budgeted.

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: Percentage of total sales Sales Variable expenses Contribution margin Fixed expenses Net operating income Product White Fragrant Loonzain Total 20% 52% 28% 100% $ 150,000 100% $390,000 100% $ 210.000 100% $750,000 100% 108,000 72% 78,000 20% 84,000 40% 270,000 36% $ 42,000 28% $ 312,000 80% $ 126,000 60% 480,000 64% 449,280 $ 30,720 Dollar sales to break-even Pand CM ratio -$702,000 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: 1. Prepare a contribution format income statement for the month based on the actual sales data. Present the income statement in the format shown above. 2. Compute the break-even point in dollar sales for the month based on your actual data. 3. Considering the fact that the company met its $750,000 sales budget for the month, the president is shocked at the results shown on your income statement in (1) above. Prepare a brief memo for the president explaining why the net operating income (loss) and the break-even point in dollar sales are different from what was budgeted