+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
Turner Corporation had net sales of $2,400,000 and interest revenue of $31,000 during 2004. Expenses for 2004 were: cost of goods sold $1,250,000; administrative expenses $212
Examine two benefits of using sensitivity analysis in evaluating the projects for your selected company. Suggest how this approach can provide a competitive advantage for th
58 Nicole, a calendar year individual, owns 30%of Creole Cravings,inc,. a C corporation that was formed on February 1,2011. She receives a $5000 monthly salary from the corp
For 2007 Mossland Corporation reported gross profit $100,000; net income of $24,000; sales $500,000; net sales $400,000; and average share outstanding 6,000. There were no p
Indicate the affect of the misstatement on Gentry Supplies Company's balance sheet and income statement for the year ended December 31, 2009.
Identify the tax consequences on the sale or exchange of the land consistent with the capital gains rulesDescribe the after tax effects on the client's cash flow based on teh
The patent was acquired in January 2015 and has a useful life of 10 years. The franchise was acquired in January 2012 and also has a useful life of 10 years. Prepare journal
To make the necessary adjustments, you are given the following information: Inventory figures in the unadjusted trial are for the beginning of year 2004. The December 31, 20