Sprint Corporation is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 32.6 million direct subscribers (accounts) that generated revenue of $33,600 million. Costs and expenses for the year were as follows (In millions): Cost of revenue $13,389 Selling, general, and administrative expenses 7,774 Depreciation 8,783 Assume that 70% of the cost of revenue and 30% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts). In part (a) and. (b), round all interim calculations and final answers to one decimal place. a. What is Sprint's break-even number of accounts, using the data and assumptions given? 26.9 X million accounts b. How much revenue per account would be sufficient for Sprint to break even if the number of accounts remained constant? 932.6 X million per account
Sprint Corporation is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 32.6 million direct subscribers (accounts) that generated revenue of $33,600 million. Costs and expenses for the year were as follows (In millions): Cost of revenue $13,389 Selling, general, and administrative expenses 7,774 Depreciation 8,783 Assume that 70% of the cost of revenue and 30% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts). In part (a) and. (b), round all interim calculations and final answers to one decimal place. a. What is Sprint's break-even number of accounts, using the data and assumptions given? 26.9 X million accounts b. How much revenue per account would be sufficient for Sprint to break even if the number of accounts remained constant? 932.6 X million per account
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 16E: Break-even analysis for a service company3 Sprint Corporation (S) is one of the largest digital...
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning