DisKing Company sells used DVDs on line. The projected after-tax net income for the current...
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DisKing Company sells used DVDs on line. The projected after-tax net income for the current year is $120,000 based on a sales volume of 200,000 DVDs. DisKing has been selling the disks at $16 each. The variable costs consist of the $10 unit purchase price of the disks and a handling cost of $2 per disk. DisKing's annual fixed costs are $600,000 and DisKing is subject to a 40 percent income tax rate. Required: a. Calculate DisKing Company's break-even point for the current year in number of DVDs. b. Calculate the increased after-tax income for the current year if projected unit sales volume increase 10 percent. c. Management expects that the price DisKing pays for used DVDs to increase
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