FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
7
Instructions
Key Code:
[Key code here]
8
9 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.
12
13
14 A.
15
Break-Even (in accounts)
%3D
16
17
18
19
20
21
22
24
million (rounded) accounts
Supporting calculations:
Revenue per account (in millions):
Total revenue (in millions)
Total accounts (in millions)
Revenue per account (in millions)
30
31
32
33
34
Variable cost per account (in millions):
Variable
Full Amount
Percentage
35
Cost of revenue (in millions)
36
Selling, gen., admin. exp. (in millions)
37
Total variable costs
38
Divided by number of accounts
Variable cost per account (in millions)
39
40
Total fixed costs (in millions):
41
42
Fixed
Full Amount
Percentage
43
Cost of revenue (in millions)
44
Selling, gen., admin. exp. (in millions)
45
Depreciation
46
Total fixed costs (in millions)
47
48
49
50 B.
51
Break-even (in $ revenue, in millions):
52
Total costs
53
Divided by number of accounts
54
Break-even
million
55
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Transcribed Image Text:7 Instructions Key Code: [Key code here] 8 9 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. 12 13 14 A. 15 Break-Even (in accounts) %3D 16 17 18 19 20 21 22 24 million (rounded) accounts Supporting calculations: Revenue per account (in millions): Total revenue (in millions) Total accounts (in millions) Revenue per account (in millions) 30 31 32 33 34 Variable cost per account (in millions): Variable Full Amount Percentage 35 Cost of revenue (in millions) 36 Selling, gen., admin. exp. (in millions) 37 Total variable costs 38 Divided by number of accounts Variable cost per account (in millions) 39 40 Total fixed costs (in millions): 41 42 Fixed Full Amount Percentage 43 Cost of revenue (in millions) 44 Selling, gen., admin. exp. (in millions) 45 Depreciation 46 Total fixed costs (in millions) 47 48 49 50 B. 51 Break-even (in $ revenue, in millions): 52 Total costs 53 Divided by number of accounts 54 Break-even million 55
Ch05 Excel Assignment
EX 05 -17 (14th ed)
Break-even analysis for a service company
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
9,765
Selling, general, and administrative
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
(асcounts).
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?
expand button
Transcribed Image Text:Ch05 Excel Assignment EX 05 -17 (14th ed) Break-even analysis for a service company 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 9,765 Selling, general, and administrative 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 (асcounts). 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?
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