Problem 5-28 (Algo) Sales Mix; Multiproduct Break-Even Analysis [LO5-9] Topper Sports, Incorporated, produces high-quality sports equipment. The company's Racket Division manufactures three tennis rackets Standard, Deluxe, and Pro-widely used in amateur play. Selected information on the rackets is given below: Selling price per racket Variable expenses per racket: Fixed production costs Advertising expense Administrative salaries Total April May Production $39.00 $ 3.25 Selling (5% of selling price) All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: Per Month $ 150,000 Standard Deluxe 2,000 8,000 Standard $ 65.00 130,000 80,000 $360,000 Sales, in units, over the past two months were as follows: Pro 1,000 5,000 1,000 3,000 12,000 8,000 Deluxe $ 100.00 Total $ 42.00 $ 5.00 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. Pro $ 145.00 $ 58.00 $ 7.25 Complete this question by entering your answers in the tabs below. 4. Will 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 $23,000. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $23,000? Do not prepare income statements; use the incremental analysis approach in determining your answer. Check
Problem 5-28 (Algo) Sales Mix; Multiproduct Break-Even Analysis [LO5-9] Topper Sports, Incorporated, produces high-quality sports equipment. The company's Racket Division manufactures three tennis rackets Standard, Deluxe, and Pro-widely used in amateur play. Selected information on the rackets is given below: Selling price per racket Variable expenses per racket: Fixed production costs Advertising expense Administrative salaries Total April May Production $39.00 $ 3.25 Selling (5% of selling price) All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: Per Month $ 150,000 Standard Deluxe 2,000 8,000 Standard $ 65.00 130,000 80,000 $360,000 Sales, in units, over the past two months were as follows: Pro 1,000 5,000 1,000 3,000 12,000 8,000 Deluxe $ 100.00 Total $ 42.00 $ 5.00 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. Pro $ 145.00 $ 58.00 $ 7.25 Complete this question by entering your answers in the tabs below. 4. Will 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 $23,000. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $23,000? Do not prepare income statements; use the incremental analysis approach in determining your answer. Check
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Problem 5-28 (Algo) Sales Mix; Multiproduct Break-Even Analysis [LO5-9]
Topper Sports, Incorporated, produces high-quality sports equipment. The company's Racket Division manufactures three tennis
rackets Standard, Deluxe, and Pro-widely used in amateur play. Selected information on the rackets is given below:
Selling price per racket
Variable expenses per racket:
Fixed production costs
Advertising expense
Administrative salaries
Total
Per Month
$ 150,000
April
May
Standard
$65.00
130,000
80,000
$360,000
Production
Selling (5% of selling price)
All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs:
$39.00
$ 3.25
Sales, in units, over the past two months were as follows:
Standard Deluxe
Pro
5,000
2,000 1,000
8,000
8,000 1,000 3,000 12,000
Deluxe
$ 100.00
Total
$42.00
$5.00
Pro
$145.00
$ 58.00
$ 7.25
Complete this question by entering your answers in the tabs below.
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 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 $23,000. What would be the effect on net operating income? What would be
the effect if Pro racket sales increased by $23,000? Do not prepare income statements; use the incremental analysis approach in
determining your answer.
Check my](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc9737efd-391f-457a-98f6-aa044a0527f1%2F820aa098-db9d-458d-944b-af19dab474d6%2Fi16cond_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 5-28 (Algo) Sales Mix; Multiproduct Break-Even Analysis [LO5-9]
Topper Sports, Incorporated, produces high-quality sports equipment. The company's Racket Division manufactures three tennis
rackets Standard, Deluxe, and Pro-widely used in amateur play. Selected information on the rackets is given below:
Selling price per racket
Variable expenses per racket:
Fixed production costs
Advertising expense
Administrative salaries
Total
Per Month
$ 150,000
April
May
Standard
$65.00
130,000
80,000
$360,000
Production
Selling (5% of selling price)
All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs:
$39.00
$ 3.25
Sales, in units, over the past two months were as follows:
Standard Deluxe
Pro
5,000
2,000 1,000
8,000
8,000 1,000 3,000 12,000
Deluxe
$ 100.00
Total
$42.00
$5.00
Pro
$145.00
$ 58.00
$ 7.25
Complete this question by entering your answers in the tabs below.
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 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 $23,000. What would be the effect on net operating income? What would be
the effect if Pro racket sales increased by $23,000? Do not prepare income statements; use the incremental analysis approach in
determining your answer.
Check my
Transcribed Image Text:J
Complete this question by entering your answers in the tabs below.
Req 1A
Variable expenses:
Req 1B
Prepare contribution format income statements for April.
Note: Round "Total percent" answers to 1 decimal place
Total variable expenses.
Fixed expenses:
Req 3
Total fixed expenses
Amount
$
Req 4
Standard
0
0
Topper Sports, Incorporated
Income Statement for April
Deluxe
%
Req 5
Amount
0
0 $
0
0
%
0
0 $
Amount
Pro
0
0
%
0
0
$
$
Total
Amount
0
0
0
0
%
0.0
0.0
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