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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. Belling price per racket Variable expenses per racketi Production Selling (5% of selling price) Standard $40.00 Deluxe $ 60.00 Pro $ 90.00 $22.00 5.2.00 $ 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: Fixed production costs Administrative salaries Advertising expense Total Per Month $122,000 102,000 52,000 $276,000 Sales, in units, over the past two months have been as follows: April May Required: Standard Deluxe Pro Total 2,000 1,000 5,000 8,000 $,000 1,000 3,000 12,000 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 $20,200. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $20,200? 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. Prev 1 of 1 Next Check my work
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