Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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: Selling price per racket Variable expenses per racket: Production Selling (5% of selling price) Standard $ 40.00 Deluxe $ 60.00 Pro $ 90.00 $ 22.00 $ 2.00 $ 27.00 $ 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: Per Month Advertising expense Fixed production costs Administrative salaries Total $ 120,000 100,000 50,000 $ 270,000 Sales, in units, over the past two months have been as follows: April May Standard Deluxe 2,000 1,000 5,000 8,000 8,000 1,000 3,000 12,000 Pro Total 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. Would the break-even point 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 $20,000. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $20,000? 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. Req 1A Req 1B Req 3 Req 4 Req 5 Prepare contribution format income statements for April. Note: Round "Total percent" answers to 1 decimal place Topper Sports, Incorporated Income Statement for April Variable expenses: Standard Deluxe Pro Total Amount % Amount % Amount % Amount % 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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started