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DATA INPUT
Current Year's Net Income 600,000$
Current Year's Sales Volume 400,000
Sales price per DVD 24$
Variable cost per unit purchase price 15$
Handling cost per unit 3$
Annual fixed costs 1,800,000$
Expected increase in unit purchase price 30%
SOLUTION
1. Break-even point in units, using the equation approach:
24$ X - 15$ + 3$ X - 1,800,000$ = 0
2. Net income if there is a 10% increase in projected unit sales volume:
New projected sales volume =400,000 x 110%
3. Volume of sales to maintain same net income if selling price remains at $16:
Target net income = 600,000$ (from original problem data)
