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Topper Sports, Inc. produces high quality sports equipment. The company’s Racket Division manufactures three tennis rackets- the Student, the Deluxe, and the Pro- that are widely used in amateur day. Selected information on the rackets is given below:
Standard
Selling Price per racket: $43.00
Variable Expenses per racket:
Production: $17.20
Selling (5% of selling price): $2.15
Deluxe
Selling Price per Racket: $62.00
Variable Expenses Per Racket:
Production: $21.70
Selling (5% of selling price): $3.10
Pro
Selling Price per Racket: $87.00
Variable Expenses per Racket:
Production: $26.10
Selling (5% of selling price): $4.35
All sales are made through the company’s own retail outlets. The Racket Division has the following fixed costs:
Per Month
Fixed Production Costs: $107,000
Advertising Expense: $108,000
Administrative Salaries: $52,000
Total: $267,000
Sales, in units, over the past two months have been as follows:
Standard (April): 4,000
Deluxe (April): 3,000
Pro (April): 7,000
Total (April): 14,000
Standard (May): 11,000
Deluxe (May): 3,000
Pro (May): 6,000
Total (May): 20,000
a. Prepare contribution format income statements for April. (Round the “Total percent” answers to one decimal place. Input all amounts as positive values except losses which should be indicated by minus sign. Omit the “$” and “%” signs in your response).
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