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10 points Topper Sports, Inc. Income Statement for May Deluxe Amount Pro Total Standard Amount Amount Amount % % Sales Variable expenses % X X

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10 points Topper Sports, Inc. Income Statement for May Deluxe Amount Pro Total Standard Amount Amount Amount % % Sales Variable expenses % X X * % % % Total variable expenses 0 0 % 0 0 % 0 0 % O 00 % % $ 0 0 % $ 0 0 % $ 0 0 5 0 00 Fred expenses Totalfred expenses O 0 Assume that sales of the Standard racket increase by $20,000. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $20,000? Do not prepare income statements; use the incremental analysis approach in determining your answer. Standard Pro Effect on Net operating income Prepare contribution format income statements for April. (Round "Total percent" answers to 1 decimal place) Topper Sports, Inc. Income Statement for April Deluxe Amount % $ 60,000 100% Pro Standard Amount % $ 80,000 100% Total % $ Amount 450,000 0 Amount $ 590,000 100% 100 % Sales Variable expenses Production Selling 44,000 4,000 55% 5% % 27,000 3,000 lo 157,500 22,500 45% 5% % % 35% 5% % 228,500 29,500 38.7% 5.0 % % % 43.7 % % % Total variable expenses 60 50 % 40 48.000 $ 32,000 % % 30,000 $ 30,000 1 st 180,000 270,000 % % 258,000 $ 332,000 40 50 56.3 % Fixed expenses 120,000 100,000 50,000 Total foced expenses Net operating income 270,000 62,000 . Problem 5-28 (Static) Sales Mix; Multiproduct Break-Even Analysis (L05-9) Topper Sports, Inc., 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: Standard $ 40.00 Deluxe $ 60.00 Pro $ 90.00 Selling price per racket Variable expenses per racket: Production Selling (54 of selling price) $ 22.00 $ 27.00 $ 3.00 $31.50 $ 4.50 $ 2.00 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 $ 120,000 100,000 50,000 $ 270,000 Sales, in units, over the past two months have been as follows: April May Standard Deluxe 2,000 1,000 8,000 1,000 Pro Total 5,000 8,000 3,000 12,000 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. Will the break-even point would 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 $20,000. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $20,000? Do not prepare income statements; use the incremental analysis approach in

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