Problem 6-28 (Algo) Sales Mix; Multiproduct Break-Even Analysis (L06-9) 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 Deluxe Selling price per racket $ 65.00 $ 100.00 $ 145.00 Variable expenses per rackett Production $ 39.00 $42.00 $ 58.00 Selling (58 of selling price) $ 3.25 $ 5.00 $ 7.25 All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: Por Month Fixed production costs $152,000 Advertising expenso 132,000 Administrative salaries 82.000 Total $366,000 Sales, in units, over the past two months have been as follows: April Standard 2,000 8,000 Deluxe 1.000 1,000 Pro 5.000 3,000 Total 8,000 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 $23,200. What would be the effect on net operating Income? What would be the effect if Pro racket sales increased by $23,2007 Do not prepare income statements; use the incremental analysis approach in determining your answer. Reg 1A Reg 1B Reg 3 Reg 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 Standard Pro Total Amount % 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 KROG 1 Reg 1B > Reg 1A Reg 18 Reg 3 Reg 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 Reg 1A Reg 1B Req3 Req 4 Reg 5 Compute the Racket Division's break-even point in dollar sales for April. (Round intermediate percen decimal place and final answer to the nearest whole dollar.) Break-even point in dollar sales Req 1A Reg 1B Reg 3 Reg 4 Reg 5 Will the break-even point would be higher or lower with May's sales mix than with April's sales mix? Higher Lower Reg 1A Reg 1B Reg 3 Reg 4 Reg 5 Assume that sales of the Standard racket increase by $23,200. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $23,2007 Do not prepare income statements; use the incremental analysis approach in determining your answer. Standard Effect on Net operating income Pro
