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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: Selling (5% of selling price) Production Standard $.50.00 Deluxe $ 75.00 Pro $100.00 $28.00 $ 2.50 $ 33.00 $ 3.75 $ 35.00 $ 5.00 All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: Fixed production costs Advertising expense Administrative salaries Total Per Month $ 130,000 110,000 60,000 $300,000 Sales, in units, over the past two months have been as follows: April May Standard Deluxe Pro 2,000 1,000 8,000 1,000 Total 5,000 8,000 3,000 12,000 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 $21,000. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $21,000? Do not prepare income statements; use tile 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. (Round "Total percent" answers to 1 decimal place) Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses Topper Sports, Incorporated Income Statement for April Standard Deluxe Pro Total Amount % Amount % Amount % Amount % Book Req 1A Req 18 Req 3 Req 4 Req 5 Prepare contribution format income statements for May. (Round "Total percent" answers to 1 decimal place) Topper Sports, Incorporated Variable expenses: Total variable expenses Fixed expenses Total fixed expenses Income Statement for May Standard Deluxe Pro Total Amount % Amount % Amount % Amount % Req 1A Req 18 Req Req 4 Req 5 Compute the Racket Division's break-even point in dollar sales for April. (Round intermediate percentage calculation decimal place and final answer to the nearest whole dollar.) Break-even point in dollar sales < Req 18 Req 4> Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 3 Req 4 Req 5 Would the break-even point be higher or lower with May's sales mix than with April's sales mix? OHigher OLower Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 3 Req 4 Assume that sales of the Standard racket increase by $21,000. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $21,000? Do not prepare income statements; use the incremental analysis approach in determining your answer. Effect on Net operating income Standard Pro
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