+1-415-670-9189
info@expertsmind.com
What will be the companys net income for the current year
Course:- Accounting Basics
Reference No.:- EM13601488




Assignment Help
Assignment Help >> Accounting Basics

Disk City, Inc. is a retailer for digital video disks. The projected net income for the current year is $2,300,000 based on a sales volume of 260,000 video disks. Disk City has been selling the disks for $20 each. The variable costs consist of the $7 unit purchase price of the 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 20 percent. (Ignore income taxes.)

Required:
1. Calculate Disk city's break-even point for the current year in number of video disks. (Round your answer to the nearest whole number.)
Break-even point units

2.What will be the company's net income for the current year if there is a 15 percent increase in projected unit sales volume? (Omit the "$" sign in your response.)
Net income $

3.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 $20? (Do not round intermediate calculations and round your final answer to nearest dollar amount. Omit the "$" sign in your response.)
Volume of sales $

4.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? (Do not round intermediate calculations and round your final answer to nearest dollar amount. Omit the "$" sign in your response.)




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
On July 1, year 1, Cobb Company issued 9% bonds in the face amount of $1,000,000 that mature in 10 years. The bonds were issued for $939,000 to yield 10%, resulting in a bon
LaGrange Corp. has forecasted that over the next four years the average annual after-tax income will be $45,731. The average book value of the manufacturing equipment that i
Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date. The cover page and the reference page
This week's materials emphasize the complexity surrounding processes designed to maximize team efficiency and performance. For your initial post to this discussion forum, be
What is the firms market value capital structure? (Do not round intermediate calculations and round your final answers to 4 decimal places - What is your companys weighted a
Joey Nariz is a narcotics trafficker who has made a career of smuggling cocaineinto the United States. Over the years, he has bought most of his supply from Colombia but mor
Prepare the worksheet necessary to produce the consolidated financial statements for Pontiac Company and its subsidiary Stark Company for the year ended December 31, 2015.
Assume that the County of Katerah maintains its books and records in a manner that facilitates preparation of the fund financial statements. Prepare the necessary entries for