DSHEET EX 21-16 Break-even analysis OBJ. 3 Sprint Nextel is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 33.3 million direct subscribers (accounts) that generated revenue of $32,563 million, Costs and expenses for the year were as follows (in millions): Cost of revenue Selling, general, and administrative expenses Depreciation $17,492 9,418 5,074 (Continued) apter 21 Cost Behavior and Cost-Volume-Profit Analysis al, and administra e data and assump Assume that 75% of the cost of revenue and 25% of the selling, general, and ad tive 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 a tions above? Round units (accounts) and per account amounts to one decimal pla b. How much revenue per account would be sufficient for Sprint Nextel to break if the number of accounts remained constant? Home Insert Draw Page Layout Formulas vataNeView X cut Arial A A O 25 EDM [b Copy Format Painter Clipboard Alignment BCD Break-Even (in accounts) = Revenue per Account Total Fixed Costs Variable Cost per Account million (rounded) accounts Supporting calculations: Revenue per account (in millions): Total revenue (in millions) Total accounts (in millions) Revenue per account (in millions) Full Amount $ 17,492 Variable cost per account (in Millions) Cost of revenue (in millions) Selling, gen., admin. exp. (in millions) Total variable costs Divided by number of accounts Variable cost per account (in millions) Variable Percentage 75% $ 13, 119.0 mornin Total faced costs in millions) * Fixed Percentage Cost of revenue in milions) Seling. gen., admin exp in millions) Depreciation Total food costs (in millions) Ex. 21-16 Cut v 10 YA A Arial Copy Format Painter B 1 U A Alignment Font board X fx D E Supporting calculations: F G H J K L Revenue per account (in millions): Total revenue (in millions) Total accounts (in millions) Revenue per account (in millions) Variable cost per account (in millions): Full Amountx $ 17,492 Variable Percentage 75% S. 13.119.0 Cost of revenue (in millions) Selling, gen., admin. exp. (in millions) Total variable costs Divided by number of accounts Variable cost per account (in millions) Total fixed costs (in millions): Fixed Percentage Full Amount X Cost of revenue (in millions) Selling, gen., admin. exp. (in millions) Depreciation Total fixed costs (in millions) Break-even (in $ revenue, in millions) Total costs Divided by number of accounts Break-even million Enter as a formula
