Topper Sports, Incorporated, produces high-quality sports equipment. The company's Racket Divisio 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: Production Selling (5% of selling price) Fixed production costs Advertising expense Administrative salaries Total April May Standard 2,000 8,000 Standard $40.00 Per Month $ 124,000 104,000 54,000 $ 282,000 Sales, in units, over the past two months have been as follows: Pro Total 8,000 5,000 3,000 12,000 Deluxe 1,000 1,000 $22.00 $ 2.00 All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: Deluxe $ 60.00 375 $ 27.00 $3.00 Pro $ 90.00 $31.50 $ 4.50 Complete this question by entering your answers in the tabs below. Check my w 4 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 $20,400. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $20,400? Do not prepare income statements; use the incremental analysis approach in determining your answer.
Topper Sports, Incorporated, produces high-quality sports equipment. The company's Racket Divisio 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: Production Selling (5% of selling price) Fixed production costs Advertising expense Administrative salaries Total April May Standard 2,000 8,000 Standard $40.00 Per Month $ 124,000 104,000 54,000 $ 282,000 Sales, in units, over the past two months have been as follows: Pro Total 8,000 5,000 3,000 12,000 Deluxe 1,000 1,000 $22.00 $ 2.00 All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: Deluxe $ 60.00 375 $ 27.00 $3.00 Pro $ 90.00 $31.50 $ 4.50 Complete this question by entering your answers in the tabs below. Check my w 4 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 $20,400. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $20,400? Do not prepare income statements; use the incremental analysis approach in determining your answer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:on 1 - Case X
9
tps://ezto.mheducation.com/ext/map/index.html?_con=con&external... A
Case 1-23/FA MA X Q2. Part 2: Analyze
Selling price per racket
Variable expenses per racket:
Production
Selling (5% of selling price)
Fixed production costs
Advertising expense
Administrative salaries
Total
April
May
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:
Standard
2,000
8,000
Req 1A
Sales, in units, over the past two months have been as follows:
Deluxe
1,000
1,000
Saved
Req 1B
Per Month
$ 124,000
104,000
54,000
$ 282,000
Req 3
X
Prepare contribution format incom
Standard
$ 40.00
All sales are made through the company's own retail outlets. The Racket Division has the following
fixed costs:
Required:
1-a. Prepare contribution format income statements for April.
1-b. Prepare contribution format income statements for May.
$ 22.00
$ 2.00
Pro
5,000
8,000
3,000 12,000
ASSASSINS
Total
Req 4
Complete this question by entering your answers in the tabs below.
Register for bartleb x
Deluxe
$ 60.00
Req 5
$ 27.00
$ 3.00
NOW AVAIL
CO
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 $20,400. What would be the effect on net
operating income? What would be the effect if Pro racket sales increased by $20,400? Do not prepare
income statements; use the incremental analysis approach in determining your answer.
Help
+
Save & Exit Su
Pro
$ 90.00
$31.50
$ 4.50
m
Check my we
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