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 Dollar sales to break-even White 48 % $ 302,400 90,720 $ 211,680 Fixed expenses CM ratio 100 % 30 % 70 % $ $ 126,000 100,800 25, 200 Fragrant 20 % $232,440 0.52 Product 100 % 80 % 20 % = $447,000 Loonzain 32% $ 201,600 110,880 90,720 $ 100 % 55 % 45 % 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. Total 100 % $ 630,000 302,400 327,600 232,440 $ 95,160 100 % 48 % 52% As shown by these data, net operating income is budgeted at $95,160 for the month and the estimated break-even sales is $447,000. Assume that actual sales for the month total $630,000 as planned. Actual sales by product are: White, $201,600; Fragrant, $252,000; and Loonzain, $176,400.

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 Dollar sales to break-even White 48 % $ 302,400 90,720 $ 211,680 Fixed expenses CM ratio 100 % 30 % 70 % $ $ 126,000 100,800 25, 200 Fragrant 20 % $232,440 0.52 Product 100 % 80 % 20 % = $447,000 Loonzain 32% $ 201,600 110,880 90,720 $ 100 % 55 % 45 % 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. Total 100 % $ 630,000 302,400 327,600 232,440 $ 95,160 100 % 48 % 52% As shown by these data, net operating income is budgeted at $95,160 for the month and the estimated break-even sales is $447,000. Assume that actual sales for the month total $630,000 as planned. Actual sales by product are: White, $201,600; Fragrant, $252,000; and Loonzain, $176,400.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 40P

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