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 48% 20% 32% 100%
Sales $297,600 100% $124,000 100% $198,400 100% $620,000 100%
Variable
expenses 89,280 30% 99,200 80% 109,120 55% 297,600 48%
Contribution
margin $208,320 70% $24,800 20% $89,280 45% 322,400 52%
Fixed expenses 227,760
Net operating income $94,640
Dollar sales to break-even = Fixed expenses = $227,760 = $438,000
UnitCM ratio 0.52
As shown by these data, net operating income is budgeted at $94,640 for the month and the estimated break-even sales is $438,000. Assume that actual sales for the month total $620,000 as planned. Actual sales by product are: White, $198,400; Fragrant, $248,000; and Loonzain, $173,600.
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.