e portion Test 2 Question 16 Gold Star Rice, Ltd., of Thailand exports Thal nce

Question

e portion Test 2 Question 16 Gold Star Rice, Ltd., of Thailand exports Thal nce throughout Asia. The company grows three varneties of rice--White, Fragrant, and Loonzaln. Budgeted sales by product and in total for the coming month are shown below Product white 48 % Fragrant 20% Loonzain 32% Total iee % Percentage of total sales Sales Variable expenses s 3se,4ee 105,120 5 245,280 100 % $146,eee ee% $ 233,680 128,48e 1eex s 73e,eee 350,480 100% 48 % 80% 20% 55 % 45 % 116,806 70% $ 29,20 sies,120 379,580 52% Contribution margin Fixed expenses Net operating income 232,96 5 146,646 Dollar sales to break-even ied expenses82 .969 232.968 $448, cM ratio e.52 As shown by these data, net operating income is budgeted at $146.640 for the month and the estimated break-even sales is $448,000. Assume that actual sales for the month total $730,000 as and Loonzalin, $204,400 planned. Actual sales by product are: White, $233,600, Fragrant, $292.000, 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 Gold Star Rice, Ltd. Contribution Income Statement Product Fragrant Loonzain Percentage of total sales

Explanation / Answer

1) Prepare contribution format income statement :

2) Break even point (dollars) = FIxed expenses/contribution margin ratio

= 232960/.43

Break even point (dollars) = 541767

Gold star rice Ltd. Contribution format income statement Product White Fragrant Loonzain Total Percentage of total assets 32 % 40 % 28 % 100 % Sales 233600 100 % 292000 100 % 204400 100 % 730000 100% Variable expenses 70080 30 % 233600 80 % 112420 55 % 416100 57% Contribution margin 163520 70 % 58400 20 % 91980 45 % 313900 43% Less: Fixed expenses 232960 Net operating income 80940

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