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 Selling (5% of selling price) All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: April May Per Month $ 124,000 104,000 54,000 $ 282,000 Sales, in units, over the past two months have been as follows: Standard Deluxe 2,000 8,000 Reg 1A Standard $ 40.00 1,000 1,000 Req 18 $ 22.00 $ 2.00 Reg 3 Pro 5,000 8,000 3,000 12,000 Total Deluxe $ 60.00 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. 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. Req 4 $ 27.00 $ 3.00 Req 5 Pro $ 90.00 $31.50 $4.50 Answer is not complete. 4
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 Selling (5% of selling price) All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: April May Per Month $ 124,000 104,000 54,000 $ 282,000 Sales, in units, over the past two months have been as follows: Standard Deluxe 2,000 8,000 Reg 1A Standard $ 40.00 1,000 1,000 Req 18 $ 22.00 $ 2.00 Reg 3 Pro 5,000 8,000 3,000 12,000 Total Deluxe $ 60.00 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. 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. Req 4 $ 27.00 $ 3.00 Req 5 Pro $ 90.00 $31.50 $4.50 Answer is not complete. 4
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Solve Requirements 1A to 5
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:
?
Mc
Graw
Hill
Fixed production costs
Advertising expense
Administrative salaries
Total
Production
$22.00
$ 2.00
Selling (5% of selling price)
All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs:
April
May
Sales, in units, over the past two months have been as follows:
Standard Deluxe
2,000
1,000
8,000
1,000
f2
Check my work mode: This shows what is correct or incorrect for the work you have compi
*
Required:
1-a. Prepare contribution format income statements for April.
1-b. Prepare contribution format income statements for May.
Req 1A
Per Month
$ 124,000
104,000
54,000
$ 282,000
f3
Req 18
Standard
$40.00
Pro
5,000
8,000
3,000 12,000
Req 3
AL
**
Complete this question by entering your answers in the tabs below.
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.
Total
f5
10
Req 4
Deluxe
$ 60.00
f6
Req 5
$ 27.00
$ 3.00
4-
Q Search
Pro
$90.00
Answer is not complete.
f7
$31.50
$ 4.50
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Step 1: Introduction of Break even point
VIEWStep 2: Preparation of Contribution Margin Income Statement for April:
VIEWStep 3: Preparation of Contribution Margin Income Statement for May:
VIEWStep 4: Calculation of Break in Point in Sales Dollar for April
VIEWStep 5: Calculation of Break in Point in Sales Dollar for May and compare with April
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