Reference no: EM1347333
Disk City, Inc. is a retailer for digital video disks. The projected net income for the current year is $2,740,000 based on a sales volume of 270,000 video disks. Disk City has been selling the disks for $22 each. The variable costs consist of the $8 unit purchase price of the disks and a handling cost of $2 per disk. Disk City's annual fixed costs are $500,000.
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 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 "tiny_mce_markerquot; 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 $22? (Do not round intermediate calculations and round your final answer to nearest dollar amount. Omit the "tiny_mce_markerquot; sign in your response.)
Volume of sales $
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 and round your final answer to nearest dollar amount. Omit the "tiny_mce_markerquot; sign in your response.)
|
Find the break even quantity
: Two different production procedure is being considered for making a new product. The 1st procedure is less capital intensive, with fixed costs of only $50,000 per year and variable costs of dollar 7,000 per unit. Find the break even quantity
|
|
Dividend policy help
: Dividend policy help - Explain why would a firm want to incorporate a dividend policy?
|
|
Illustrate what are the levels of income every worker
: Illustrate what are the levels of income every worker and consumption per worker.
|
|
Application to convert kilometers in miles
: Application will input number of kilometers, compute number of miles, and display number of miles. You will use a constant to store the kilometers-to-miles conversion factor.
|
|
Describing cost-volume-profit
: Disk City, Inc. is a retailer for digital video disks. The projected net income for the current year is $2,740,000 based on a sales volume of 270,000 video disks.
|
|
Obtain the cost of equity for your slp company
: Show your work to used to obtain the cost of equity for your SLP company and Is this cost of equity higher or lower than you expected?
|
|
What consiquences will the market equilibrium be efficient
: If television sets are sold in a perfectly competitive market, calculate the annual number sold. Under what consiquences will the market equilibrium be efficient.
|
|
Explain using capital budgeting and capital structure
: Suppose you work for local hospital you and your colleagues require deciding on whether to purchase new machine for the clinic.
|
|
Motivational strategies and theories in workplace
: Motivational strategies and theories in workplace - Prepare a response examining how various motivational strategies affect productivity in a selected workplace-your own or one with which you are very familiar.
|