Managerial Accounting
17th Edition
ISBN: 9781260247787
Author: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Publisher: RENT MCG
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Chapter 5, Problem 21P
PROBLEM 5-21 Sales Mix; Multiproduct Break-Even Analysis LO5-9
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:
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.
Required:
- Prepare a contribution format income statement for the month based on the actual sales data. Present the income statement in the format shown above.
- Compute the break-even point in dollar sales for the month based on your actual data.
- Considering the fact that the company met its $750,000 sales budget for the month, the president is shocked at the results shown on your income statement in (1) above. Prepare a brief memo for the president explaining why the net operating income (loss) and the break-even point in dollar sales are different from what was budgeted.
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02:06:01
Gold Star Rice, Limited, 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.
Produce
Percentage of total sales
Sales
Variable expenses
Contribution margin
White
40%
$.355,200
106,560
$ 246,640
Fragrant
20%
100%
30%
20% $29,600
140,000
118,400
Loonsain
32%
100%
80%
$236.000
130,240
20% $106,560
Complete this question by entering your answers in the tabs below.
Fixed expenses
Net operating income
Dollar sales to break-even - Fixed expenses/CM ratio-$232,440/0.52= $447,000
As shown by these data, net operating income is budgeted at $152,360 for the month and the estimated break-even sales is
$447,000.
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.
Dutal
100%
100% $ 240,000
55%
45%
355,200…
PROBLEM 6-21 Sales Mix; Multiproduct Break-Even Analysis LO6-9
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
............
Assignment
2.1 ABC Itd. Manufactures and sells four types of products under the band names of A,
B, C and D. the sales mix in value comprises 33 %, 41 2 %, 162% and 8 % of A,
3
3
3
B, C and D respectively. The total budgeted sales (100%) are birr 60,000 per month.
Operating costs are as follows:
Variable cost:
A 60% of selling price
B 68% of selling price
C 50% of selling price
D 40% of selling price
The fixed cost is birr 14,700 per month
Required
Compute the breakeven point for the products on an overall basis
Chapter 5 Solutions
Managerial Accounting
Ch. 5.A - EXERCISE 5A-1 High-Low Method LO5-10 The Cheyenne...Ch. 5.A - EXERCISE 5A-2 Least-Squares Regression LO5-11...Ch. 5.A - EXERCISE 5A-3 Cost Behavior; High-Low Method...Ch. 5.A - Prob. 4ECh. 5.A - EXERCISE 5A-5 Least-Squares Regression LO5-11...Ch. 5.A - Prob. 6PCh. 5.A - Problem 5A-7 Cost Behavior; High-Low Method;...Ch. 5.A - Problem 5A-8 High-Low Method; Predicting Cost...Ch. 5.A - Prob. 9PCh. 5.A - Prob. 10P
Ch. 5.A - Case 5A-11 Mixed Cost Analysis and the Relevant...Ch. 5.A - CASE 5A-12 Analysis of Mixed Costs in a Pricing...Ch. 5 - Prob. 1QCh. 5 - Often the most direct route to a business decision...Ch. 5 - Prob. 3QCh. 5 - What is the meaning of operating leverage?Ch. 5 - What is the meaning of break-even point?Ch. 5 - 5-6 In response to a request from your immediate...Ch. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 1AECh. 5 - Prob. 2AECh. 5 - Prob. 3AECh. 5 - Prob. 4AECh. 5 - Prob. 5AECh. 5 - Prob. 1F15Ch. 5 - Prob. 2F15Ch. 5 - Prob. 3F15Ch. 5 - Prob. 4F15Ch. 5 - Prob. 5F15Ch. 5 - Prob. 6F15Ch. 5 - Prob. 7F15Ch. 5 - Prob. 8F15Ch. 5 - Prob. 9F15Ch. 5 - Prob. 10F15Ch. 5 - Prob. 11F15Ch. 5 - Prob. 12F15Ch. 5 - Prob. 13F15Ch. 5 - Prob. 14F15Ch. 5 - Prob. 15F15Ch. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Prob. 3ECh. 5 - Prob. 4ECh. 5 - Prob. 5ECh. 5 - Prob. 6ECh. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - EXERCISE 5-10 Multiproduct Break-Even Analysis...Ch. 5 - Prob. 11ECh. 5 - EXERCISE 5-12 Multiproduct Break-Even Analysis...Ch. 5 - EXERCISE 5-13 Changes in Selling Price, Sales...Ch. 5 - Prob. 14ECh. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Prob. 17ECh. 5 - Prob. 18ECh. 5 - Prob. 19PCh. 5 - PROBLEM 5-20 CVP Applications: Break-Even...Ch. 5 - PROBLEM 5-21 Sales Mix; Multiproduct Break-Even...Ch. 5 - Prob. 22PCh. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 -
PROBLEM 5-26 CVP Applications; Break-Even...Ch. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 -
PROBLEM 5-31 Interpretive Questions on the CVP...Ch. 5 - Prob. 32C
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