Problem 5-28 (Algo) Sales Mix; Multiproduct Break-Even Analysis (LO5-9) 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: Pro $ 90.00 Selling price per racket Variable expenses per racket: Production Selling (5t of selling price) Standard Deluxe $ 40.00 $ 60.00 $ 22.00 $ 27.00 $ 2.00 $ 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: Pixed production costa Advertising expense Administrative salaries Total Per Month $ 122,000 102,000 52,000 $ 276,000 Sales, in units, over the past two months have been as follows: April May Standard Deluxe Pro Total 2,000 1,000 5,000 8,000 8,000 1,000 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 $20,200. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $20,200? Do not prepare income statements; use the incremental analysis approach in determining your answer. Reg 1A Reg 1B Req3 Reg 4 Reg 5 Prepare contribution format income statements for April. (Round "Total percent" answers to 1 decimal place) Topper Sports, Inc. Income Statement for April Deluxe Pro Total Standard Amount % Amount % Amount % Amount % % % % % Variable expenses: % % % % % % % % % % % % % % % 0 % Total variable expenses 0 0 0 % 0 0 0 % 0 % 0.0 % 0.0 % $ 0 0 % $ 0 0 % $ 0 $ 0 Fixed expenses: Total foxed expenses 0 $ 0 Reg 1A Reg 1B Reg 3 Reg 4 Req 5 Prepare contribution format income statements for May. (Round "Total percent" answers to 1 decimal place) Topper Sports, Inc. Income Statement for May Standard Deluxe Pro Amount Amount Amount % Total % % 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 Totalfixed expenses 0 0 Reg 1A Reg 1B Req3 Reg 4 Reg 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 Req 1A Req 1B Reg 3 Reg 4 Reg 5 Assume that sales of the Standard racket increase by $20,200. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $20,2007 Do not prepare Income statements; use the incremental analysis approach in determining your answer. Standard Pro Effect on Net operating income
