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What selling price per disk must disk city establish

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Question: Disk City, Incorporated, is a retailer for digital video disks. The projected net income for the current year is $1,860,000 based on a sales volume of 230,000 video disks. Disk City has been selling the disks for $18 each. The variable costs consist of the $6 unit purchase price of the disks and a handling cost of $2 per disk. Disk City's annual fixed costs are $440,000. 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?

Reference no: EM133554159

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