Problem 5-28 (Algo) Sales Mix; Multiproduct Break-Even Analysis (LO5-9] 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: Standard $ 40.00 Deluxe $ 60.00 Pro $ 90.00 Selling price per racket Variable expenses per racket: Production Selling (5% of selling price) $ 22.00 $ 2.00 $ 27.00 $ 3.00 $31.50 $ 4.50 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 $ 124,000 104,000 54,000 $ 282,000 Sales, in units, over the past two months have been as follows: April May Standard 2,000 8,000 Deluxe 1,000 1,000 Pro 5,000 3,000 Total 8,000 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 $20,400. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $20,400? Do not prepare income statements, use the incremental analysis approach in determining your answer. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Reg 3 Reg 4 Req 5 Drenare contribution format income statemente for Anril(Dound "Total percent" answers to 1 decimallace Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 3 Req 4 Reg 5 Prepare contribution format income statements for April. (Round "Total percent" answers to 1 decimal place) Topper Sports, Incorporated Income Statement for April Deluxe % Amount % Standard Pro Total Amount Amount % Amount % Variable expenses Total variable expenses 0 0 0 0 0 0 0 0.0 $ 0 0 $ 0 0 $ 0 0 $ 0 0.0 Fixed expenses. Total fixed expenses 0 $ 0 Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 3 Req 4 Reg 5 Prepare contribution format income statements for May. (Round "Total percent" answers to 1 decimal place) Topper Sports, Incorporated Income Statement for May Deluxe % Amount % Standard Pro Total Amount Amount % Amount % Variable expenses Total variable expenses 0 0 0 0 0 0 0 0.0 $ 0 0 $ 0 0 $ 0 0 $ 0 0.0 . Fixed expenses Total fixed expenses 0 $ 0 Complete this question by entering your answers in the tabs below. Req 1A Req 1B Reg 3 Req 4 Req 5 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.) Break-even point in dollar sales Complete this question by entering your answers in the tabs below. Req 1A Req 1B Reg 3 Req 4 Req 5 Whether the break-even point would be higher or lower with May's sales mix than with April's sales mix? O Higher O Lower Complete this question by entering your answers in the tabs below. Req 1A Req 1B Reg 3 Reg 4 Reg 5 Assume that sales of the Standard racket increase by $20,400. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $20,400? Do not prepare income statements; use the incremental analysis approach in determining your answer. Standard Pro Effect on Net operating income
