Disk City, Inc., is a retailer for digital video disks. The projected net income for the current year is $1,950,000 based on a sales volume of 230,000 video disks. Disk City has been selling the disks for $19 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 $580,000.