What volume of sales (in dollars) must Disk City achieve in the coming year to maintain the same net income as projected for the current year if the unit selling price remains at $17? 2. In order to cover a 20 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?
What volume of sales (in dollars) must Disk City achieve in the coming year to maintain the same net income as projected for the current year if the unit selling price remains at $17? 2. In order to cover a 20 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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What volume of sales (in dollars) must Disk City achieve in the coming year to maintain the same net income as projected for the current year if the unit selling price remains at $17?
2. In order to cover a 20 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?

Transcribed Image Text:c. What volume of sales (in dollars) must Disk City achieve in the coming year to maintain the same net income as projected for the
current year if the unit selling price remains at $17?
Note: Do not round intermediate calculations. Round your final answer to the nearest whole number.
d. In order to cover a 20 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?
Note: Do not round intermediate calculations. Round your final answer to 2 decimal places.

Transcribed Image Text:Disk City, Incorporated, is a retailer for digital video disks. The projected net income for the current year is $2,130,000 based on a
sales volume of 230,000 video disks. Disk City has been selling the disks for $17 each. The variable costs consist of the $4 unit
purchase price of the disks and a handling cost of $2 per disk. Disk City's annual fixed costs are $400,000.
Management is planning for the coming year, when it expects that the unit purchase price of the video disks will increase 20 percent.
(Ignore income taxes.)
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