Gold Star Rice Ltd of Thailand exports Thai rice throughout

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 48 % Fragrant 20 % Loonzain 32 % Total 100 % Percentage of total sales Sales Variable expenses $316,800 95,040 221,760 100% $660,000 316,800 343,200 234,000 ? 109,200 100% $132,000 105,600 70% $ 26,400 100% $211,200 116,160 20% $ 95,040 100% 48 % 52 % 30 % 80 % 45 % Contribution margin Fixed expenses Net operating income Fixed expenses = $234,000 = $450,000 Dollar sales to break-even- CM ratio 0.52 As shown by these data, net operating income is budgeted at $109,200 for the month and the estimated break-even sales is $450,000 Assume that actual sales for the month total $660,000 as planned. Actual sales by product are: White, $211,200; Fragrant, $264,000; and Loonzain, $184,800 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

Solution

White Fragnant Loonzain Total Percentage of Total Sales% 48% 20% 32% 100% Sales $211,200 100% $264,000 100% $184,800 100% $660,000 100% Less : Variable Expenses $63,360 30% $211,200 80% $101,640 55% $376,200 48% Contribution $147,840 70% $52,800 20% $83,160 45% $283,800 52% Less Fixed Expenses $234,000 Net Operating Loss= $ (283800-234000)= $49800