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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: Standard Deluxe $ 70.00 Pro $ 100.00 Selling price per racket $ 55.00 Variable expenses per racket: Production $ 35.00 $ 33.00 $ 2.75 $36.00 $ 5.00 Selling (5% of selling price) $ 3.50 All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: Per Month Fixed production costs $ 142,000 Advertising expense 122,000 72,000 Administrative salaries Total $ 336,000 Sales, in units, over the past two months have been as follows: Standard Deluxe Pro Total 2,000 1,000 5,000 8,000 April 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 Division's break-even point in dollar sales for April.

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 Deluxe $ 70.00 Pro $ 100.00 Selling price per racket $ 55.00 Variable expenses per racket: Production $ 35.00 $ 33.00 $ 2.75 $36.00 $ 5.00 Selling (5% of selling price) $ 3.50 All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: Per Month Fixed production costs $ 142,000 Advertising expense 122,000 72,000 Administrative salaries Total $ 336,000 Sales, in units, over the past two months have been as follows: Standard Deluxe Pro Total 2,000 1,000 5,000 8,000 April 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 Division's break-even point in dollar sales for April.

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: Deluxe Pro Standard $ 55.00 Selling price per racket $ 70.00 $ 100.00 Variable expenses per racket: Production $ 33.00 $ 2.75 $ 35.00 $ 3.50 $36.00 $ 5.00 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 Fixed production costs $ 142,000 Advertising expense 122,000 72,000 Administrative salaries Total $ 336,000 Sales, in units, over the past two months have been as follows: Standard Deluxe Pro Total 2,000 1,000 5,000 8,000 April 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 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 $22,200. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $22,200? 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 Req 1B Req 3 Req 4 Req 5 Prepare contribution format income statements for April. (Round "Total percent" answers to 1 decimal place) Topper Sports, Incorporated Income Statement for April Standard Deluxe Pro % Amount % % Amount Sales Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses $ Amount 0 0 0 0 $ 0 0 0 0 $ Amount 0 0 0 0 $ $ Total 0 0 0 0 % 0.0 0.0
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: Deluxe Pro Standard $ 55.00 Selling price per racket $ 70.00 $ 100.00 Variable expenses per racket: Production $ 33.00 $ 2.75 $ 35.00 $ 3.50 $36.00 $ 5.00 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 Fixed production costs $ 142,000 Advertising expense 122,000 72,000 Administrative salaries Total $ 336,000 Sales, in units, over the past two months have been as follows: Standard Deluxe Pro Total 2,000 1,000 5,000 8,000 April 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 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 $22,200. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $22,200? 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 Req 1B Req 3 Req 4 Req 5 Prepare contribution format income statements for April. (Round "Total percent" answers to 1 decimal place) Topper Sports, Incorporated Income Statement for April Standard Deluxe Pro % Amount % % Amount Sales Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses $ Amount 0 0 0 0 $ 0 0 0 0 $ Amount 0 0 0 0 $ $ Total 0 0 0 0 % 0.0 0.0
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