Topper Sports, Incorporated, produces high-quality sports equipment. The companys Racket Division manufactures three tennis racketsStandard, Deluxe, and Prowidely used in amateur play. Selected information on the rackets is given below:

	Standard	Deluxe	Pro
Selling price per racket	$ 60.00	$ 90.00	$ 100.00
Variable expenses per racket:
Production	$ 36.00	$ 45.00	$ 36.00
Selling (5% of selling price)	$ 3.00	$ 4.50	$ 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	$ 134,000
Advertising expense	114,000
Administrative salaries	64,000
Total	$ 312,000

Sales, in units, over the past two months were as follows:

	Standard	Deluxe	Pro	Total
April	2,000	1,000	5,000	8,000
May	8,000	1,000	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 Divisions break-even point in dollar sales for April.

4. Will the break-even point be higher or lower with Mays sales mix than with Aprils sales mix?

5. Assume that sales of the Standard racket increase by $21,400. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $21,400? Do not prepare income statements; use the incremental analysis approach in determining your answer.