Question

answer all the questions wilt the solution

1. Topper Sports, Inc. 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 Pro $41.00 $62.00 81.00 Selling price per racket Variable expenses per racket Production Selling (5% of selling price) $ 16.40 $21.70 $24 30 S 2.05 3.10 4.05 All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs Per Month Fixed production costs Advertising expense Administrative salaries $102,000 108,000 53,000 Total $263,000 Sales, in units, over the past two months have been as follows April May Standard Deluxe 3,000 3,000 4,000 10,000 Pro 7,000 5,000 Total 14,000 18,000 Required: 1a. Prepare contribution format income statements for April 1b. Prepare contribution format income statements for May 2. Compute the Racket Division's break-even point in dollar sales for April 3. Compute the Racket Division's break-even point in unit 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 $24,000. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $24,000? Do not prepare income statements, use the incremental analysis approach in determining your answer

Answer 1

Topper sports produces high quality sports equipment..It has racket division which produces three types of rackets. we were asked to prepare income statement and breakeven point for the month of april. For the requirement 4 , we need to compare breakeven sales of april and may and based on the calculations, may month has higher breakeven point.