Rotelco is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 100 direct subscribers (accounts) that generated revenue of $61,100. Costs and expenses for the year were as follows:
Cost of revenue | $26,300 |
Selling, general, and administrative expenses | 16,500 |
6,700 |
Assume that 60% of the cost of revenue and 40% 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 Rotelco's break-even number of accounts, using the data and assumptions above? Round to the nearest whole number.
accounts
b. How much revenue per account would be sufficient for Rotelco to break even if the number of accounts remained constant? Round to the nearest dollar.
$ per account
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- Break-even analysis for a service company Rotelco is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 100 direct subscribers (accounts) that generated revenue of $61,300. Costs and expenses for the year were as follows: Cost of revenue $28,800 Selling, general, and administrative expenses 19,600 Depreciation 6,700 Assume that 75% of the cost of revenue and 30% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts). In part (a) and (b), round all interim calculations and final answers to one decimal place. a. What is Rotelco's break-even number of accounts, using the data and assumptions above? Round to the nearest whole number.fill in the blank 1 accounts b. How much revenue per account would be sufficient for Rotelco to break even if the number of accounts remained constant? Round to the nearest dollar.$fill in the blank 2 per accountarrow_forwardPharoah Corporation's Cajun Spice division has a segment margin is $434200 for the current reporting period. The division has an asset turnover of 3.1. Segment margin as a percentage of sales is 10%. What is the division's ROI? O 31% O 10% O 21% O The answer cannot be determined from the information given.arrow_forwardWadsworth Distribution Company has total advertising expenses of $84,000: $32,000 for radio and $52,000 for print advertising. The expense for print advertising is allocated to Department A and Department B based on the total of net sales represented by each department. The total net sales for Wadsworth Distribution Company is $744,000. The net sales generated are $558,000 and $186,000 for Department A and B, respectively. How much of the expense for print advertising should be allocated to Department A?arrow_forward
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