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: Standard Deluxe Pro selling price per racket $ 60.00 $90.00 $100.00 Variable expenses per racket Production $36.00 $ 45.00 $36.00 Selling (54 of welling price) $ 3.00 $ 4.50 $ 5.00 All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: Per Month Fixed production conto $ 136,000 Advertising expense 116.000 Administrative salaries 66,000 Total $ 318,000 Sales, in units, over the past two months have been as follows: AprII standard Deluxe 2,000 1,000 8.000 1,000 Pro Total 5,000 3,000 3,000 12,000 May 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 $21,600. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $21,600? Do not prepare income statements, use the incremental analysis approach in determining your answer. Complete this question by entering your answers in the tabs below. 4 Das Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 Reg 3 Reg 4 Reg 5 Prepare contribution format income statements for April (Round Total percent answers to 1 decimal place) Pro Topper Sports, Inc. Income Statement for April Deluxe Amount % % % Total Standard Amount % Amount Amount % % % Variable expenses % % % % ll % % % % % % X % % % 1% * % Total variable expenses % % % % + Fixed expenses Total food expenses Reg 18 ) Complete this question by entering your answers in the tabs below. Reg 1A Reg 10 Reg 3 Reg 4 Reg 5 Prepare contribution format income statements for May. (Round Total percent" answers to 1 decimal place) Topper Sports, Inc Income Statement for May Deluxe Amount % % % Pro Standard Amount % Total Amount % Amount % Variable expenses % % % % % % % % % % % % % % % % 0 % 0 01% . 0.01 Total variable expenses 01% 0 %$ $ $ 0 0 0 0 % 0.01% 01% 0 Fixed expenses + Total fixed expenses $ Reg 1A Req 18 Reg 3 Reg 4 Reg 5 Assume that sales of the Standard racket increase by $21,600. What would be the effect on net operating Income? What would be the effect if Pro racket sales increased by $21,600? Do not prepare income statements; use the incremental analysis approach in determining your answer. Standard Pro Effect on Not operating income
