# Problem 5-21 Sales Mix; Multiproduct Break-Even Analysis

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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:

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Product
White Fragrant Loonzain Total
Percentage of total sales 48 % 20 % 32 % 100 %
Sales \$ 350,400 100 % \$ 146,000 100 % \$ 233,600 100 % \$ 730,000 100 %
Variable expenses 105,120 30 % 116,800 80 % 128,480 55 % 350,400 48 %
Contribution margin \$ 245,280 70 % \$ 29,200 20 % \$ 105,120 45 % 379,600 52 %
Fixed expenses 228,280
Net operating income \$ 151,320

Dollar sales to break-even = Fixed expenses = \$228,280 = \$439,000
CM ratio 0.52

As shown by these data, net operating income is budgeted at \$151,320 for the month and the estimated break-even sales is \$439,000.

Assume that actual sales for the month total \$730,000 as planned. Actual sales by product are: White, \$233,600; Fragrant, \$292,000; and Loonzain, \$204,400.

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.

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Problem 5-21 Sales Mix; Multiproduct Break-Even Analysis was first posted on October 8, 2019 at 8:07 am.