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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
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 final answer up to nearest whole number.) 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? 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 $21? (Do not round intermediate calculations. Round your final answer to the nearest whole number.) 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. Round your final answer to 2 decimal places.) & Answer is complete but not entirely correct. 1. Break-even point 53,333 units Net income 2,314,500 Volume of sales Selling price per disk 5,868,450 $ $ 24.50
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