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Topper Sports, Inc., produces high-quality sports equipment. The companys Racket Division manufactures three tennis racketsthe Standard, the Deluxe, and the Prothat are widely used in
Topper Sports, Inc., produces high-quality sports equipment. The companys Racket Division manufactures three tennis racketsthe Standard, the Deluxe, and the Prothat are widely used in amateur play. Selected information on the rackets is given below:
| Standard | Deluxe | Pro | ||||
| Selling price per racket | $ | 45.00 | $ | 70.00 | $ | 100.00 |
| Variable expenses per racket: | ||||||
| Production | $ | 27.00 | $ | 35.00 | $ | 36.00 |
| Selling (5% of selling price) | $ | 2.25 | $ | 3.50 | $ | 5.00 |
All sales are made through the companys own retail outlets. The Racket Division has the following fixed costs:
| Per Month | ||
| Fixed production costs | $ | 138,000 |
| Advertising expense | 118,000 | |
| Administrative salaries | 68,000 | |
| Total | $ | 324,000 |
Sales, in units, over the past two months have been as follows:
| Standard | Deluxe | Pro | Total | |
| April | 2,000 | 1,000 | 5,000 | 8,000 |
| May | 8,000 | 1,000 | 3,000 | 12,000 |
3. Compute the Racket Divisions break-even point in dollar sales for April.
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