Reference no: EM132502686

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

• Dollar sales to break-even=Fixed expenses/ CM ratio = $449,280/ 0.64= $702,000
• 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.

Question 1. Construct a contribution format income statement for the month based on the actual sales data.

Question 2. Compute the break-even point in dollar sales for the month based on your actual data.