MANAGERIAL ACCOUNTING W/CONNECT
16th Edition
ISBN: 9781260586916
Author: Garrison
Publisher: MCG CUSTOM
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Textbook Question
Chapter 5, Problem 21P
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 rice—White, Fragrant, and Loonzain. Budgeted sales by product and in total for the coming month are shown below:
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:
- Prepare a contribution format income statement for the month based on the actual sales data. Present the income statement in the format shown above.
- Compute the break-even point in dollar sales for the month based on your actual data.
- 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.
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QUESTION 1
Kiwenkira & Son Ltd makes and sells a single product marketed under a brand name Kiwetonic for the West African sub region and has total production capacity of 30,000 units per month.
The budget for January 2020 contained the following information:
Normal capacity (Units)
27,000
Variable costs per unit:
Production (GH¢)
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PROBLEM 6-21 Sales Mix; Multiproduct Break-Even Analysis LO6-9
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
Fragrant
Loonzain
Total
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 72%
78,000 20% 84,000
40%
270,000
36%
Contribution margin ..
42,000 28% $312,000 80% $126,000
60%
480,000
64%
Fixed expenses....
449,280
Net operating income
$ 30,720
............
Assignment
2.1 ABC Itd. Manufactures and sells four types of products under the band names of A,
B, C and D. the sales mix in value comprises 33 %, 41 2 %, 162% and 8 % of A,
3
3
3
B, C and D respectively. The total budgeted sales (100%) are birr 60,000 per month.
Operating costs are as follows:
Variable cost:
A 60% of selling price
B 68% of selling price
C 50% of selling price
D 40% of selling price
The fixed cost is birr 14,700 per month
Required
Compute the breakeven point for the products on an overall basis
Chapter 5 Solutions
MANAGERIAL ACCOUNTING W/CONNECT
Ch. 5.A - EXERCISE 5A-1 High-Low Method LO5-10 The Cheyenne...Ch. 5.A - EXERCISE 5A-2 Least-Squares Regression LO5-11...Ch. 5.A - EXERCISE 5A-3 Cost Behavior; High-Low Method...Ch. 5.A - Prob. 4ECh. 5.A - EXERCISE 5A-5 Least-Squares Regression LO5-11...Ch. 5.A - Prob. 6PCh. 5.A - Problem 5A-7 Cost Behavior; High-Low Method;...Ch. 5.A - Problem 5A-8 High-Low Method; Predicting Cost...Ch. 5.A - Prob. 9PCh. 5.A - Prob. 10P
Ch. 5.A - Case 5A-11 Mixed Cost Analysis and the Relevant...Ch. 5.A - CASE 5A-12 Analysis of Mixed Costs in a Pricing...Ch. 5 - Prob. 1QCh. 5 - Often the most direct route to a business decision...Ch. 5 - Prob. 3QCh. 5 - What is the meaning of operating leverage?Ch. 5 - What is the meaning of break-even point?Ch. 5 - 5-6 In response to a request from your immediate...Ch. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 1AECh. 5 - Prob. 2AECh. 5 - Prob. 3AECh. 5 - Prob. 4AECh. 5 - Prob. 5AECh. 5 - Prob. 1F15Ch. 5 - Prob. 2F15Ch. 5 - Prob. 3F15Ch. 5 - Prob. 4F15Ch. 5 - Prob. 5F15Ch. 5 - Prob. 6F15Ch. 5 - Prob. 7F15Ch. 5 - Prob. 8F15Ch. 5 - Prob. 9F15Ch. 5 - Prob. 10F15Ch. 5 - Prob. 11F15Ch. 5 - Prob. 12F15Ch. 5 - Prob. 13F15Ch. 5 - Prob. 14F15Ch. 5 - Prob. 15F15Ch. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Prob. 3ECh. 5 - Prob. 4ECh. 5 - Prob. 5ECh. 5 - Prob. 6ECh. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - EXERCISE 5-10 Multiproduct Break-Even Analysis...Ch. 5 - Prob. 11ECh. 5 - EXERCISE 5-12 Multiproduct Break-Even Analysis...Ch. 5 - EXERCISE 5-13 Changes in Selling Price, Sales...Ch. 5 - Prob. 14ECh. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Prob. 17ECh. 5 - Prob. 18ECh. 5 - Prob. 19PCh. 5 - PROBLEM 5-20 CVP Applications: Break-Even...Ch. 5 - PROBLEM 5-21 Sales Mix; Multiproduct Break-Even...Ch. 5 - Prob. 22PCh. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 -
PROBLEM 5-25 Changes in Fixed and Variable Costs;...Ch. 5 -
PROBLEM 5-26 CVP Applications; Break-Even...Ch. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 -
PROBLEM 5-31 Interpretive Questions on the CVP...Ch. 5 -
CASE 5-32 Break-Even Analysis for Individual...Ch. 5 - Prob. 33C
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