Sales Mix; Multiproduct Break-Even Analysis
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:
|
|
White
|
Fragrant
|
|
Percentage of total sales
|
|
48%
|
|
|
20%
|
|
|
Sales
|
$
|
292,800
|
100%
|
$
|
122,000
|
100%
|
|
Variable expenses
|
|
87,840
|
30%
|
|
97,600
|
80%
|
|
|
|
|
|
|
|
|
|
Contribution margin
|
$
|
204,960
|
70%
|
$
|
24,400
|
20%
|
|
|
|
|
|
|
|
|
|
Fixed expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income
|
|
|
|
|
|
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As shown by these data, net operating income is budgeted at $89,960 for the month and break even sales at $437,000.
Assume that actual sales for the month total $610,000 as planned. Actual sales by product are: White, $195,200; Fragrant, $244,000; and Loonzain, $170,800.
Required:
Prepare a contribution format income statement for the month based on actual sales data.
Compute the break-even point in dollar sales for the month based on your actual data.