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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

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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 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 Production $ 35,00 Selling (5% of selling price) s sloo All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: April May Standard $ 50.00 Per Month $ 128,000 108,000 58,000 $ 294,000 Standard 2,000 8,000 Sales, in units, over the past two months have been as follows: Deluxe Pro Total 1,000 5,000 1,000 3,000 12,000 $ 28.00 $ 2.50 Deluxe $ 75.00 8,000 Pro $ 100.00 $ 33.00 $ 3.75 Check my v
Transcribed Image Text: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: Fixed production costs Advertising expense Administrative salaries Total Production $ 35,00 Selling (5% of selling price) s sloo All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: April May Standard $ 50.00 Per Month $ 128,000 108,000 58,000 $ 294,000 Standard 2,000 8,000 Sales, in units, over the past two months have been as follows: Deluxe Pro Total 1,000 5,000 1,000 3,000 12,000 $ 28.00 $ 2.50 Deluxe $ 75.00 8,000 Pro $ 100.00 $ 33.00 $ 3.75 Check my v
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 $20,800. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $20,800? Do not prepare income statements; use the incremental analysis approach in determining your answer. Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses Standard Amount Topper Sports, Incorporated Income Statement for April Deluxe Amount % Amount Pro Total Amount
Transcribed Image Text: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 $20,800. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $20,800? Do not prepare income statements; use the incremental analysis approach in determining your answer. Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses Standard Amount Topper Sports, Incorporated Income Statement for April Deluxe Amount % Amount Pro Total Amount
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