Sprint Corporation is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 32.6 million direct subscribers (accounts) that generated revenue of $33,600 million. Costs and expenses for the year were as follows (In millions): Cost of revenue $13,389 Selling, general, and administrative expenses 7,774 Depreciation 8,783 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). In part (a) and. (b), round all interim calculations and final answers to one decimal place. a. What is Sprint's break-even number of accounts, using the data and assumptions given? 26.9 X million accounts b. How much revenue per account would be sufficient for Sprint to break even if the number of accounts remained constant? 932.6 X million per account

Sprint Corporation is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 32.6 million direct subscribers (accounts) that generated revenue of $33,600 million. Costs and expenses for the year were as follows (In millions): Cost of revenue $13,389 Selling, general, and administrative expenses 7,774 Depreciation 8,783 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). In part (a) and. (b), round all interim calculations and final answers to one decimal place. a. What is Sprint's break-even number of accounts, using the data and assumptions given? 26.9 X million accounts b. How much revenue per account would be sufficient for Sprint to break even if the number of accounts remained constant? 932.6 X million per account

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

9
Required information [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses $ 1,600,000 700,000 900,000 660,000 Net operating income $4 240,000 Average operating assets $ 1,000,000 At the beginning of this year, the company has a $325,000 investment opportunity with the characteristics: Sales Contribution margin ratio Fixed expenses $ 520,000 70 % of sales $ 312,000 The company's minimum required rate of return is 15%. 9. If the company pursues the investment opportunity and otherwise performs the same as last year, wha (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%.)) ROI % ( Prev 1O Pr Ps to search RELS
Required information Skip to question [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales $ 1,500,000 Variable expenses 730, 000 Contribution margin 770, 000 Fixed expenses 470,000 Net operating income $ 300,000 Average operating assets $ 937,500 At the beginning of this year, the company has a $362, 500 investment opportunity with the following cost and revenue characteristics: Sales $ 580,000 Contribution margin ratio 70% of sales Fixed expenses $ 319,000 The company's minimum required rate of return is 10%. 8. If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Round your answer to 2 decimal places.)
Stryker corp. Has two major business segments- east and west. In April, the east business segment had sales revenue of 500,000, variable expenses of 280,000 and traceable fixed expenses of 80,000. During the same month, the west business segment had sales revenues of 970,000, variable expenses of 514,000 and traceable fixed expenses of 184,000. The common fixed expenses total 280,000 and were allocated as follows: 112,000 to the east business segment and 168,000 to the west business segment. A properly constructed segmented income statement in a contribution format would show that the segment margin of the east business segment is: 108,000 28,000 140,000 280,000
Elway Company provided the following income statement for the last year: Sales $714,390,000 Less: Variable expenses 557,689,000 Contribution margin $156,701,000 Less: Fixed expenses 195,362,000 Operating income $-38,661,000 At the beginning of last year, Elway had $38,657,000 in operating assets. At the end of the year, Elway had $41,360,000 in operating assets. Required: 1. Compute average operating assets.$fill in the blank 1 2. Compute the margin (as a percent) and turnover ratios for last year. If required, round your answers to two decimal places. Margin fill in the blank 2 % Turnover fill in the blank 3 3. Compute ROI as a percent. Use the part 2 final answers in these calculations and round the final answer to two decimal places.fill in the blank 4 % 4. ROI measures a company’s ability to generate relative to its investment in assets. The greater the ROI, the efficiently the company is generating from its assets. 5. CONCEPTUAL CONNECTION Comment…
Gayner Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for November. Variable Actual Fixed Element Element per Total for per Month November Well Serviced 4,300 $ 148,400 Revenue Employee salaries and 1,000 $ 006 wages 009 2$ 20,200 Servicing materials $29,600 30,300 Other expenses When the company prepared its planning budget at the beginning of November, it assumed that 30 wells would have been serviced. However, 34 wells were actually serviced during November. The spending variance for "Servicing materials" for November would have been closest to: MacBook Air い DD 888 delete 8. 6 9 %24 %24 %24 %24 %24
Flamengo Co is a sporting goods manufacturing. Last year, report the following Income Statement: Sales $620,000 Cost of goods sold 316,000 Gross margin $304,000 Selling and administrative expense 246,000 Operating income $ 58,000 Less: Income taxes (at 40%) 34,000 Net income $ 24,000 At the beginning of the year, the value of operating assets was $263,000. At the end of the year, the value of operating assets was $363,000. Flamengo Co. requires a minimum rate of return of 15%. Total capital employed equals $350,000 and the actual cost of capital is 6%, Calculate the Return on Investment. (Carry computations out to two decimal places.)
Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages. TannenhillCompany ElectronicsIndustryAverage Sales $800,000 100 % Cost of goods sold 512,000 70 Gross profit $288,000 30 % Selling expenses $176,000 17 % Administrative expenses 64,000 7 Total operating expenses $240,000 24 % Operating income $48,000 6 % Other revenue 16,000 2 $64,000 8 % Other expense 8,000 1 Income before income tax $56,000 7 % Income tax expense 24,000 5 Net income $32,000 2 % a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. If required, round percentages to one decimal place. Enter all amounts as positive numbers.
Nextel Communications, Inc. is one of the largest digital wireless service providers in the United States. In a recent year, it had 8,666,500 accounts that generated revenues of $7,689,000,000. Costs and expenses were as follows: Cost of revenue$ 2,869,000,000 Selling, general and administrative expenses 3,020,000,000 Depreciation 1,746,000,000 Assume that 65% of the cost of revenue and 55% of the selling, general and administrative expenses are variable to the number of accounts.Required: a) What is Nextel’s break-even number of accounts using the data and assumptions above? Round any per-unit computations to the nearest dollar. b) How much revenue per account would be sufficient for Nextel to break even if the number of accounts remained constant?