Break even analysis for a service company
Sprint Nextel is one of the largest digital wireless .service providers in the United States. In a recent year, it had approximately 32.5 million direct subscribers (accounts) that generated revenue of $35,345 million. Costs and expenses for the year were as follows (in millions):
Cost of revenue | $20,841 |
Selling, general, and administrative expenses | 9,765 |
Depreciation | 2,239 |
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).
A. What is Sprint Nextel’s break-even number of accounts, using the data and assumptions given? Round units (accounts) and per-account amounts to one decimal place.
B. How much revenue per account would be sufficient for Sprint Nextel to break even if the number of accounts remained constant?
Accounting Information Systems
Cornerstones of Financial Accounting
Corporate Financial Accounting
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
Principles of Economics (MindTap Course List)
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
Probability and Statistics for Engineering and the Sciences
Fundamentals of Financial Management (MindTap Course List)
STATISTICS F/BUSINESS+ECONOMICS-TEXT
Principles of Microeconomics (MindTap Course List)
Foundations of Business (MindTap Course List)
Essentials of Business Communication (MindTap Course List)
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
Brief Principles of Macroeconomics (MindTap Course List)
Financial And Managerial Accounting
Financial Accounting
Management, Loose-Leaf Version
College Accounting, Chapters 1-27
Contemporary Marketing
Essentials of Economics (MindTap Course List)
College Accounting (Book Only): A Career Approach
Managerial Accounting: The Cornerstone of Business Decision-Making
Financial Accounting
Accounting Information Systems
Intermediate Accounting: Reporting And Analysis
MKTG 12:STUDENT ED.-TEXT
Accounting (Text Only)
Statistics for Business & Economics, Revised (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
Exploring Economics
College Accounting (Book Only): A Career Approach
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Pkg Acc Infor Systems MS VISIO CD
Principles of Macroeconomics (MindTap Course List)
Fundamentals of Financial Management (MindTap Course List)
Corporate Financial Accounting
PAYROLL ACCT.,2019 ED.(LL)-TEXT
Survey of Accounting (Accounting I)
Purchasing and Supply Chain Management
Macroeconomics
Economics (MindTap Course List)
Practical Management Science
Cornerstones of Cost Management (Cornerstones Series)
Microeconomics
Economics For Today
Managerial Accounting
Understanding Management (MindTap Course List)
Micro Economics For Today
Macroeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
Principles of Microeconomics
Economics: Private and Public Choice (MindTap Course List)