Answer 3. Volume of sales = $5,862,857
Explanation:
Contribution margin per unit in current year = $19 - ($5+ $2)
= $19 - $7 = $12
Contribution margin per unit in coming year = $19 - [($5 * 130 %) + $2]
= $19 - $8.50 = $10.50
Total contribution in current year = 270,000 units * $12 = $3,240,000.
Since coming year net income is same as current year & there is no change in fixed costs .
Thus , Total contribution in coming year = Total contribution in current year = $3,240,000.
Volume of sales in coming year
= (Total contribution in coming year / Contribution margin per unit in coming year* Selling price per unit
= ($3,240,000 / $10.50) * $19
= $5,862,857
Answer 4 : Selling price per disk ; $23.07
Explanation :
Since contribution margin ratio in current year still maintain in coming year , the variable cost ratio for both years will also be same
Variable cost ratio in current year = $7 / $19
Variable cost per unit in coming year = ($5 * 130 %) + $2 = $8.5
Selling price per disk in coming year
= Variable cost per unit in coming year / Variable cost ratio in current year
= 8.50 / /(7 / 19)
= (8.50 * 19) / 7
= $23.07
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