Break-Even Analysis Media outlets such as ESPN and Fox Sports often have websites that provide in-depth coverage of news and events. Portions of these websites are restricted to members who pay a monthly subscription to gain access to exclusive ner and commentary. These websites typically offer a free trial period to introduce viewers to the site. Assume that during a recent fiscal year, ESPN.com spent $4,200,000 on a promotional campaign for the ESPN.com website that offered two free month: of service for new subscribers. In addition, assume the following information: Number of months an average new customer stays with the service (including the two free months) Revenue per month per customer subscription Variable cost per month per customer subscription Determine the number of new customer accounts needed to break even on the cost of the promotional campaign. In forming your answer, (1) treat the cost of the promotional campaign as a fixed cost, and (2) treat the revenue less variable cost per account for the subscription period as the unit contribution margin. accounts

Break-Even Analysis Media outlets such as ESPN and Fox Sports often have websites that provide in-depth coverage of news and events. Portions of these websites are restricted to members who pay a monthly subscription to gain access to exclusive ner and commentary. These websites typically offer a free trial period to introduce viewers to the site. Assume that during a recent fiscal year, ESPN.com spent $4,200,000 on a promotional campaign for the ESPN.com website that offered two free month: of service for new subscribers. In addition, assume the following information: Number of months an average new customer stays with the service (including the two free months) Revenue per month per customer subscription Variable cost per month per customer subscription Determine the number of new customer accounts needed to break even on the cost of the promotional campaign. In forming your answer, (1) treat the cost of the promotional campaign as a fixed cost, and (2) treat the revenue less variable cost per account for the subscription period as the unit contribution margin. accounts

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 15E

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Break-even analysisMedia outlets such as ESPN and Fox Sports often have websites thatprovide in-depth coverage of news and events. Portions of thesewebsites are restricted to members who pay a monthly subscription to gain access to exclusive news and commentary. These websites typicallyoffer a free trial period to introduce viewers to the site. Assume thatduring a recent fiscal year, ESPN.com spent $4,200,000 on a promotionalcampaign for the ESPN .com website that offered two free months ofservice for new subscribers. In addition, assume the following Information: Number of months an average new customer stays with the service (including the two free months) 14 months Revenue per month per customer subscription $10.00 Variable cost per month per customer subscription $5.00 Determine the number of new customer accounts needed to break evenon the cost of the promotional campaign. In forming your answer, (1) treat the cost of the promotional campaign as a fixed cost and (2)…
Break-Even Analysis Media outlets such as ESPN and Fox Sports often have websites that provide in-depth coverage of news and events. Portions of these websites are restricted to members who pay a monthly subscription to gain access to exclusive news and commentary. These websites typically offer a free trial period to introduce viewers to the site. Assume that during a recent fiscal year, ESPN.com spent $4,200,000 on a promotional campaign for the ESPN.com website that offered two free months of service for new subscribers. In addition, assume the following information: Number of months an average new customer stays with the service(including the two free months) 14 months Revenue per month per customer subscription $10.00 Variable cost per month per customer subscription $5.00 Determine the number of new customer accounts needed to break even on the cost of the promotional campaign. In forming your answer, (1) treat the cost of the promotional campaign as a fixed cost, and…
Media outlets often have websites that provide in-depth coverage of news and events. Portions of these websites are restricted to members who pay a monthly subscription to gain access to exclusive news and commentary. These websites typically offer a free trial period to introduce viewers to the website. Assume that during a recent fiscal year, one outlet spent $2,686,200 on a promotional campaign for its website that offered two free months of service for new subscribers. In addition, assume the following information: Number of months an average new customer stays with the service(including the two free months) 20 months Revenue per month per customer subscription $20 Variable cost per month per customer subscription $7 Determine the number of new customer accounts needed to break even on the cost of the promotional campaign. In forming your answer, (1) treat the cost of the promotional campaign as a fixed cost, and (2) treat the revenue less variable cost per account for…
Break-Even Analysis Media outlets such as ESPN and Fox Sports often have web sites that provide in-depth coverage of news and events. Portions of these web sites are restricted to members who pay a monthly subscription to gain access to exclusive news and commentary. These web sites typically offer a free trial period to introduce viewers to the web site. Assume that during a recent fiscal year, ESPN.com spent $2,566,580 on a promotional campaign for its web site, offering two free months of service for new subscribers. In addition, assume the following information: Number of months an average new customer stays with the service (including the two free months) 17 months Revenue per month per customer subscription $20 Variable cost per month per customer subscription $7 Determine the number of new customer accounts needed to break even on the cost of the promotional campaign. In forming your answer, (1) treat the cost of the promotional campaign as a…
Break-Even Analysis Media outlets often have websites that provide in-depth coverage of news and events. Portions of these websites are restricted to members who pay a monthly subscription to gain access to exclusive news and commentary. These websites typically offer a free trial period to introduce viewers to the website. Assume that during a recent fiscal year, one outlet spent $3,822,980 on a promotional campaign for its website that offered two free months of service for new subscribers. In addition, assume the following information: Number of months an average new customer stays with the service(including the two free months) 25 months Revenue per month per customer subscription $23 Variable cost per month per customer subscription $8 Determine the number of new customer accounts needed to break even on the cost of the promotional campaign. In forming your answer, (1) treat the cost of the promotional campaign as a fixed cost, and (2) treat the revenue less variable…
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ESPN and Fox Sports spent $4,200,000 on a promotional campaign for ESPN.com website that offeredtwo free months of service for new subscribers. In addition, assume the following information:Number of months an average new customer stays with the service (including the two free months): 14monthsRevenue per month per customer subscription : $10.00Variable cost per month per customer subscription : $5.00Determine the number of new customer accounts to break even the cost of promotional campaign.Treat the campaign cost as fixed and revenue less variable cost per account period as the unitcontribution margin.