Break$-$even analysis

Media outlets such as ESPN and FOX Sports often have websites that provide in$-$depth coverage of nevs 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 websites. Assume that during a recent fiscal year,

ESPN.com spent $$4,200,000$ on a promotional

campaign for the

ESPN.com websites that offered two free months of service for new subscribers. In addition, assume the following information:

Number of months an average nev customer stays with the service

$($including the two free months$)$

$14$ months

Revenue per month per customer subscription

$$10\mathrm{.}00$

Variable cost per month per customer subscription

$$5\mathrm{.}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 $(2)$ treat the revenue less variable cost per account for the subscription period

as the unit contribution margin.

accounts