Gold Star Rice, Ltd., of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-Fragrant, White, and Loonzain. Budgeted sales by product and in total for the coming month are shown below:
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Product
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Total
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White
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Fragrant
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Loonzain
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Percentage of total sales
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48%
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20%
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32%
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100%
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Sales
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374,400
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100%
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156,000
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100%
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249,600
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100%
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780,000
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100%
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Variable expenses
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112,320
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30%
|
124,800
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80%
|
137,280
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55%
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374,400
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48%
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Contribution margin
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262,080
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70%
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S 31,200
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20%
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S 112,320
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45%
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405,600
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52%
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Fixed expenses
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|
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233,480
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|
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Net operating income
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|
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S 172,120
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Dollar sales to break even = Fixed expenses/ CM ratio = $233.480/ 0.52= $449,000
As shown by these data, net operating income is budgeted at $172,120 for the month and break even sales at $449,000.
Assume that actual sales for the month total $780,000 as planned. Actual sales by product are: White. $249,600: Fragrant, $312,000: and Loonzain, $218,400.
Required:
1. Prepare a contribution format income statement for the month based on actual sales data.
2. Compute the break-even point in dollar sales for the month based on your actual data.