Sprint Nextel is one of the largest digital wireless service providers in the United States. In a recent year, it had 39.7 million direct subscribers (accounts) that generated revenue of $14,647 million. Costs and expenses for the year were as follows (in millions):



Assume that 70% of the cost of revenue and 40% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts).

a. What is Sprint Nextel's break-even number of accounts, using the data and assumptions provided above? Round to one decimal place.

accounts

b. How much revenue per account would be sufficient for Sprint Nextel to break even if the number of accounts remained constant? Round to the nearest dollar.

$ per account





Break-even (accounts) =fixed cost/revenue per account- variable cost
Break-even (accounts) =7030.9/revenue per account-152=_______ accounts


Break-even (accounts) =Fixed Cost /Revenue per Account-Variable Cost per Account


b. 39.7 million accounts =$7,030.9/x-$152 X= break-even revenue per account
=$