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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 Pro

Selling price per racket $ $65\mathrm{.}00$ $ $100\mathrm{.}00$ $ $145\mathrm{.}00$

Variable expenses per racket:

Production $ $39\mathrm{.}00$ $ $42\mathrm{.}00$ $ $58\mathrm{.}00$

Selling $(5\%$ of selling price$)$ $ $3\mathrm{.}25$ $ $5\mathrm{.}00$ $ $7\mathrm{.}25$

All sales are made through the company$$s own retail outlets. The Racket Division has the following fixed costs:

Per Month

Fixed production costs $ $150,000$

Advertising expense $130,000$

Administrative salaries $80,000$

Total $ $360,000$

Sales, in units, over the past two months have been as follows:

Standard Deluxe Pro Total

April $2,0001,0005,0008,000$

May $8,0001,0003,00012,000$

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.

$4.$ 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 $$23,000.$ What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $$23,000?$ Do not prepare income statements; use the incremental analysis approach in determining your answer.

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