Question
Problem 5-21 Sales Mix; Multiproduct Break-Even Analysis [LO5-9] Gold Star Rice, Ltd., of Thailand exports Thai rice throughout Asia. The company grows three varieties of
Problem 5-21 Sales Mix; Multiproduct Break-Even Analysis [LO5-9]
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 | $ | 297,600 | 100 | % | $ | 124,000 | 100 | % | $ | 198,400 | 100 | % | $ | 620,000 | 100 | % | ||||
| Variable expenses | 89,280 | 30 | % | 99,200 | 80 | % | 109,120 | 55 | % | 297,600 | 48 | % | ||||||||
| Contribution margin | $ | 208,320 | 70 | % | $ | 24,800 | 20 | % | $ | 89,280 | 45 | % | 322,400 | 52 | % | |||||
| Fixed expenses | 228,800 | |||||||||||||||||||
| Net operating income | $ | 93,600 | ||||||||||||||||||
| Dollar sales to break-even | = | Fixed expenses | = | $228,800 | = $440,000 |
| CM ratio | 0.52 |
As shown by these data, net operating income is budgeted at $93,600 for the month and the estimated break-even sales is $440,000.
Assume that actual sales for the month total $620,000 as planned. Actual sales by product are: White, $198,400; Fragrant, $248,000; and Loonzain, $173,600.
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.
Prepare a contribution format income statement for the month based on the actual sales data.
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Accounting And Audit With Bank Securities Theory Methodology Practice Improvement Of Accounting And Audit Of Operations With Securities Issued By The Bank
Authors: Viktorija Koval'chuk, Igor' Shhurov
1st Edition
620600032X, 978-6206000327
