7InstructionsKey Code:[Key code here]89 Answers are entered in the cells with gray backgrounds.10 Cells with non-gray backgrounds are protected and cannot be edited.11 An asterisk (*) will appear to the right of an incorrect entry.121314 A.15Break-Even (in accounts)%3D1617181920212224million (rounded) accountsSupporting calculations:Revenue per account (in millions):Total revenue (in millions)Total accounts (in millions)Revenue per account (in millions)3031323334Variable cost per account (in millions):VariableFull AmountPercentage35Cost of revenue (in millions)36Selling, gen., admin. exp. (in millions)37Total variable costs38Divided by number of accountsVariable cost per account (in millions)3940Total fixed costs (in millions):4142FixedFull AmountPercentage43Cost of revenue (in millions)44Selling, gen., admin. exp. (in millions)45Depreciation46Total fixed costs (in millions)47484950 B.51Break-even (in $ revenue, in millions):52Total costs53Divided by number of accounts54Break-evenmillion55 Ch05 Excel AssignmentEX 05 -17 (14th ed)Break-even analysis for a service companyUse the provided Excel template to complete the following questionusing Excel formulas where appropriate...... ..Sprint Nextel is one of the largest digital wireless service providers in theUnited States. In a recent year, it had approximately 32.5 million directsubscribers (accounts) that generated revenue of $35,345 million. Costs andexpenses for the year were as follows (in millions):Cost of revenue$20,8419,765Selling, general, and administrativeexpensesDepreciation2,239Assume that 70% of the cost of revenue and 30% of the selling, general, andadministrative expenses are variable to the number of direct subscribers(асcounts).1. What is Sprint Nextel's break-even number of accounts, using the data andassumptions given? Round units (accounts) and per-account amounts to onedecimal place.2. How much revenue per account would be sufficient for Sprint Nextel to breakeven if the number of accounts remained constant?

Break-even number of accounts=Total Fixed Costs(Revenue Per Account – Variable Cost per Account)Part 1: Break-even number of accounts=Total Fixed Costs(Revenue Per Account – Variable Cost per Account)=$15,326.80(1,087.54 – 539.02)=$15,326.80548.52= 27.9 million accountsPart 2: Break-even (in $ revenue, in millions)=Total Costsnumber of accounts=$32,84532.5= $1,010.61 Variable Cost Percentage=Variable Cost per accountRevenue per account×100=539.021087.54×100= 49.56% Workings: Calculations:

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Use the provided Excel template to complete the following question using Excel formulas where appropriate. 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 9,765 expenses 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). 1. 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. 2. How much revenue per account would be sufficient for Sprint Nextel to break even if the number of accounts remained constant?

Use the provided Excel template to complete the following question using Excel formulas where appropriate. 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 9,765 expenses 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). 1. 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. 2. How much revenue per account would be sufficient for Sprint Nextel to break even if the number of accounts remained constant?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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