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
(6)
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 |
| 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?
fill in the blank 1 million accounts
b. How much revenue per account would be sufficient for Sprint to break even if the number of accounts remained constant?
$fill in the blank 2 million per account
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