Disk City, Inc. is a retailer for digital video disks. The projected net income for the current year is $1,540,000 based on a sales volume of 210,000 video disks. Disk City has been selling the disks for $19 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 30 percent. (Ignore income taxes.)

1. 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 $19?(Do not round intermediate calculations. Round your final answer to the nearest whole number.)

question (2)

Corrigan Enterprises is studying the acquisition of two electrical component insertion systems for producing its sole product, the universal gismo. Data relevant to the systems follow.

Model no. 6754:Variable costs, $16.00 per unitAnnual fixed costs, $985,700

Model no. 4399:Variable costs, $11.80 per unitAnnual fixed costs, $1,114,200

Corrigan's selling price is $70 per unit for the universal gismo, which is subject to a 5 percent sales commission. (In the following requirements, ignore income taxes.)

1. Assume Model 4399 requires the purchase of additional equipment that is not reflected in the preceding figures. The equipment will cost $440,000 and will be depreciated over a five-year life by the straight-line method. How many units must Corrigan sell to earn $969,000 of income if Model 4399 is selected? As in requirement (2), sales and production are expected to average 49,000 units per year.(Do not round intermediate calculations and round your final answer up to nearest whole number.)
2. Ignoring the information presented in part (3), at what volume level will the annual total cost of each system be equal?(Do not round intermediate calculations and round your final answer up to nearest whole number.)

Houston-based Advanced Electronics manufactures audio speakers for desktop computers. The following data relate to the period just ended when the company produced and sold 40,000 speaker sets:

Sales$3,280,000Variable costs820,000Fixed costs2,310,000

Management is considering relocating its manufacturing facilities to northern Mexico to reduce costs. Variable costs are expected to average $18.00 per set; annual fixed costs are anticipated to be $1,986,000. (In the following requirements, ignore income taxes.)

1. If variable costs remain constant, by how much must fixed costs change?
2. If fixed costs remain constant, by how much must unit variable cost change?