Part 2: Analyze Topper Sports Inc. operations for the period and summarize your conclusions and recommendations in a formal report addressed to the Chief Financial Officer of the company.

Address the following questions in your analysis:

1. Comment on each products variable expense and contribution margin ratios
2. Elaborate how the sales volume of each product affects the net operating income for the company as a whole
3. Identify the product that will be most advantageous to sell at the highest possible volumes in order to maximize the companys profits and why you think so
4. List several strategies that you foresee as potentially viable for improving the companys profits: analyze possible changes in sales volumes and various variable or fixed costs leading to increases in profits
   • Increase advertising to increase the popularity of the product;

Some examples of strategies may include (make sure to expand your analysis beyond these examples):

• Decrease advertising to eliminate some of the expenses if the product(s) is/are perceived as widely popular;
• Use higher quality materials to increase the appeal of the product;
• Use lower-quality materials to decrease the cost of the product;
• Reorganize compensation structure such as:
  • Implementing a comprehensive commission structure to incentivize salespeople to make more sales, or
  • Replacing commission with a fixed salary compensation structure to limit the increase in variable cost with increases in sales;
  • Increase selling price to maximize revenues with flat sales volume;
  • Decrease selling price to incentivize an increase in sales volume.

Please support your recommendations with dollar values and/or calculations of the financial implications of the recommended strategies.

Assume that sales of the Standard racket increase by $22,400. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $22,400 ? Do not prepare income statements; use the incremental analysis approach in determining your answer. 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: All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: Sales, in units, over the past two months have been as follows: 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 $22,400. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $22,400 ? Do not prepare income statements; use the incremental analysis approach in determining your answer. Prepare contribution format income statements for April. (Round "Total percent" answers to 1 decimal place) Prepare contribution format income statements for May. (Round "Total percent" answers to 1 decimal place) Compute the Racket Division's break-even point in dollar sales for April. (Round intermediate percentage calculations to 1 decimal place and final answer to the nearest whole dollar.) Assume that sales of the Standard racket increase by $22,400. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $22,400 ? Do not prepare income statements; use the incremental analysis approach in determining your