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Topper Sports, Incorporated, produces high-quality sports equipment. The company's Racket Division manufactures three tennis racketsthe Standard, the Deluxe, and the Pro-that are widely used in amateur play. Selected information on the rackets is given below: Standard $ 55.00 Deluxe $ 86.00 Pro $ 125.00 Selling price per racket Variable expenses per racket: Production Selling (5% of selling price) $ 33.00 $ 2.75 $ 43.00 $ 4.30 $ 45.00 $ 6.25 All sales are made through the company's own retail outlets. The Racket Division has the following fixed costs: Fixed production costs Advertising expense Administrative salaries Total Per Month $ 148,000 128,000 78,000 $ 354,000 Sales, in units, over the past two months have been as follows: April May Standard Deluxe 2,000 1,000 8,000 1,000 Pro 5,000 3,000 Total 8,000 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 $22,800. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $22,800? Do not prepare income statements; use the incremental analysis approach in determining your answer. Topper Sports, Incorporated Income Statement for April Deluxe % Amount % Standard Amount Pro Amount Total Amount % % Variable expenses: Total variable expenses 0 0 0 0 0 0 0 0.0 $ 0 0 $ 0 0 $ 0 0 $ 0 0.0 Fixed expenses: Total fixed expenses 0 $ 0

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