Problem 5-28 (Algo) Sales Mix; Multiproduct Break-Even Analysis (L05-9] Topper Sports, Inc., produces high-quality sports equipment. The company's Racket Division manufactures three tennis racketsthe Standard, the Deluxe, and the Prothat are widely used in amateur play. Selected information on the rackets is given below: Standard $ 60.00 Deluxe $ 90.00 Pro $100.00 Selling price per racket Variable expenses per racket: Production Selling (5% of selling price) $36.00 $ 3.00 $ 45.00 $ 4.50 $36.00 $ 5.00 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 $ 136,000 116,000 66,000 $ 318,000 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 Total 5,000 8,000 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 $21,600. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $21,600? Do not prepare income statements; use the incremental analysis approach in determining your answer. Topper Sports, Inc. Income Statement for April Deluxe Amount % Pro Standard Amount % Total Amount Amount % % % % % % Sales Variable expenses Production Selling % % % % % % % % % % % % % % % 0 0 0 0 0 % 0 % 0 % 0 % 0 % 0 % 0.0 % 0.0 % $ 0 $ 0 0 $ 0 Total variable expenses Contribution margin Fixed expenses Production Advertising Administrative 0 Total fixed expenses Net operating income $ 0 Prepare contribution format income statements for May. (Round "Total percent" answers to 1 decimal place) Topper Sports, Inc. Income Statement for May Deluxe Amount % Pro Total Standard Amount % Amount % % Amount % Sales % % % % Variable expenses Production Selling % % % % % % % % % % % % % % 0 0 % 0 0 0 0 % 0 % 0 % 0 % $ 0.0 % 0.0 % $ 0 0% $ 0 $ 0 0 0 Total variable expenses Contribution margin Fixed expenses: Production Advertising Administrative Total fixed expenses 0 Net operating income $ 0 Compute the Racket Division's break-even point in dollar sales for April. (Round intermediate percentage calculations to 1 decimal place and final answer to the nearest whole dollar.) Break-even point in dollar sales Assume that sales of the Standard racket increase by $21,600. What would be the effect on net operating income? What would be the effect if Pro racket sales increased by $21,600? Do not prepare income statements; use the incremental analysis approach in determining your answer. Standard Pro Effect on Net operating income