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Topper Sports, Incorporated, produces high-quality sports equipment. The company's Racket Division manufactures three tennis racketsthe Standard, the Deluxe, and the Prothat are widely used in
Topper Sports, Incorporated, produces high-quality sports equipment. The company's Racket Division manufactures three tennis racketsthe Standard, the Deluxe, and the Prothat are widely used in amateur play. Selected information on the rackets is given below: Standard $ 70.00 Deluxe $ 106.00 Pro $ 160.00 Selling price per racket Variable expenses per racket: Production Selling (5% of selling price) $ 42.00 $ 3.50 $ 53.00 $ 5.30 $ 64.00 $ 8.00 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 $ 156,000 136,000 86,000 $ 378,000 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 5,000 3,000 Total 8,000 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. 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 $23,600. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $23,600? 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 Reg 1B Reg 3 Reg 4 Reg 5 Prepare contribution format income statements for April. (Round "Total percent" answers to 1 decimal place) Total Topper Sports, Incorporated Income Statement for April Deluxe Pro % Amount % Amount 100 $ 106,000 100 $ 800,000 Standard Amount $ $ 140,000 % Amount 100 $ 1,046,000 % 100 Sales Variable expenses: Production Selling 60 50 40 84,000 7,000 53,000 5,300 320,000 40,000 457,000 52,300 43.7 5.0 51 5 5 91,000 65 58,300 55 360.000 45 509,300 48.7 $ 49,000 35 $ 47,700 45 $ 440,000 55 $ 536,700 51.3 Total variable expenses Contribution margin Fixed expenses Production Advertising Administrative 160,000 140,000 90,000 Total fixed expenses 390,000 146,700 Net operating income $ Complete this question by entering your answers in the tabs below. Reg 1A Reg 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 $ 760,234 Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 3 Reg 4 Reg 5 Assume that sales of the Standard racket increase by $23,600. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $23,600? Do not prepare income statements; use the incremental analysis approach in determining your answer. Standard $ 24,000 $ Pro 13,200 Effect on Net operating income
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