Question
10 points Skipped Topper Sports, Incorporated, produces high-quality sports equipment. The company's Racket Division manufactures three tennis rackets-the Standard, the Deluxe, and the Pro-that
10 points Skipped Topper Sports, Incorporated, produces high-quality sports equipment. The company's Racket Division manufactures three tennis rackets-the Standard, the Deluxe, and the Pro-that are widely used in amateur play. Selected information on the rackets is given below: Selling price per racket Variable expenses per racket: Production Selling (5% of selling price) Pro Standard $ 65.00 Deluxe $ 100.00 $ 145.00 $ 39.00 $3.25 $42.00 $5.00 $ 58.00 $7.25 eBook Print References All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: Fixed production costs Advertising expense Administrative salaries Total Per Month $ 150,000 130,000 80,000 $360,000 Sales, in units, over the past two months have been as follows: April May Standard Deluxe. Pro 2,000 1,000 5,000 8,000 1,000 3,000 12,000 Total 8,000 Required: 1-a. Prepare contribution format income statements for April. 1-b. Prepare contribution format income statements for May 3. Compute the Racket Division's break-even point in dollar sales for April. 4. Would the break-even point be higher or lower with May's sales mix than with April's sales mix? 5. Assume that sales of the Standard racket increase by $23,000. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $23,000? Do not prepare income statements; use the incremental analysis approach in
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