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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
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 $ 70.00 $106.00 $160.ee Variable expenses per racket: Production $ 42.00 $ 53.00 $ 64.ee Selling (5% of selling price) $ 3.50 $ 5.30 $8.00 All sales are made through the company's own retail outlets. The Rocket Division has the following fixed costs Fixed production costs Advertising expense Administrative salaries Total Per Month $ 158,000 138,000 88, een $ 384,000 Sales, In units, over the past two months have been as follows: April May Standard Deluxe 2,000 1,000 8,000 1,000 Pro Total 5,eee 8,888 3,808 12, eee Required: 1-a. Prepare contribution format income statements for April. 1-5. 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 $23,800, What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $23,800? Do not prepare income statements, use the incremental analysis approach in determining your answer Reg 1A Reg 13 Reg 3 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 Amount Pro Total Standard Amount Amount Amount Variable expenses % % * 5 Total variable expenses 0 0,09 OX 0 100 $ OS OS O OX $ $ 0 0.0 Variable expenses % 9 %6 R % % 16 % % % % 01% 0 % Total variable expenses 09 0 0 0 0 0 % 0% oo 0.0 % 0.019 0 % S 0 $ 0 5 Fored expenses Total foed expenses 0 0 Req 1A Reg 1B Reg 3 Reg 4 Req 5 Prepare contribution format income statements for May. (Round "Total percent" answers to 1 decimal place) Standard Amount % Topper Sports, Inc. Income Statement for May Deluxe Amount % Pro Total Amount % Amount % % % Variable expenses % % % % % % % % % % Total variable expenses % 0 % 0 0 % 096 0 0 0 0.0 0 % 0 % 0 0 $ $ 0 $ 0 % $ 0 0.0 Fixed expenses % % % Variable expenses % % % % % RRRR % % % Total variable expenses 0 0 0 % 0 00 0 % 0 % Oo 0 % 0 % $ 0 $ 0 0% $ $ 0 0.0 Fixed expenses Total food expenses OO $ Req 1A Req 1B Reg 3 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 18 Req3 Red 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 Req 1A Req 18 Reg 3 Reg 4 Req5 Assume that sales of the Standard racket increase by $23,800. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $23,800? Do not prepare income statements; use the incremental analysis approach in determining your answer.. Standard Effect on Net operating income Pro
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