Disk City, Inc., is a retailer for digital video disks. The projected net income for the current year is $2,340,000 based on a sales volumeof 290,000 video disks. Disk City has been selling the disks for $17 each. The variable costs consist of the $5 unit purchase price ofthe disks and a handling cost of $2 per disk. Disk City's annual fixed costs are $560,000.Management is planning for the coming year, when it expects that the unit purchase price of the video disks will increase 30 percent.(Ignore income taxes.)Required:1. Calculate Disk City's break-even point for the current year in number of video disks. (Round your final answer up to nearest wholenumber.)2. What will be the company's net income for the current year if there is a 20 percent increase in projected unit sales volume?3. What volume of sales (in dollars) must Disk City achieve in the coming year to maintain the same net income as projected for thecurrent year if the unit selling price remains at $17? (Do not round intermediate calculations. Round your final answer to the nearestwhole number.)4. In order to cover a 30 percent increase in the disk's purchase price for the coming year and still maintain the current contribution-margin ratio, what selling price per disk must Disk City establish for the coming year? (Do not round intermediate calculations. Roundyour final answer to 2 decimal places.)1.2.3.4Break-even pointNet incomeVolume of salesSelling price per disk+unitsChe

Disk City, Inc., is a retailer for digital video disks. The projected net of 290,000 video disks. Disk City has been selling the disks for $17 the disks and a handling cost of $2 per disk. Disk City's annual fixe- Management is planning for the coming year, when it expects that (Ignore income taxes.) Required: 1. Calculate Disk City's break-even point for the current year in nun number.) the 2. What will be the company's net income for the current year if 3. What volume of sales (in dollars) must Disk City achieve in the ce

Disk City, Inc., is a retailer for digital video disks. The projected net of 290,000 video disks. Disk City has been selling the disks for $17 the disks and a handling cost of $2 per disk. Disk City's annual fixe- Management is planning for the coming year, when it expects that (Ignore income taxes.) Required: 1. Calculate Disk City's break-even point for the current year in nun number.) the 2. What will be the company's net income for the current year if 3. What volume of sales (in dollars) must Disk City achieve in the ce

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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