Determine the number of new customer accounts

Assignment Help Accounting Basics
Reference no: EM132563323

Question - Break-Even Analysis

Media outlets such as ESPN and Fox Sports often have websites that provide in-depth coverage of news and events. Portions of these websites are restricted to members who pay a monthly subscription to gain access to exclusive news and commentary.

These websites typically offer a free trial period to introduce viewers to the site. Assume that during a recent fiscal year, ESPN.com spent $4,200,000 on a promotional campaign for the ESPN.com website that offered two free months of service for new subscribers. In addition, assume the following information:

Number of months an average new customer stays with the service (including the two free months) 14 months

Revenue per month per customer subscription $10.00 Variable cost per month per customer subscription $5.00

Determine the number of new customer accounts needed to break even on the cost of the promotional campaign. In forming your answer, (1) treat the cost of the promotional campaign as a fixed cost, and (2) treat the revenue less variable cost per account for the subscription period as the unit contribution margin.

Reference no: EM132563323

Questions Cloud

Question - Margin of Safety : If the margin of safety for Canace Company was 20%, fixed costs were $1,875,000, and variable costs were 80% of sales, what was the amount of actual sales
Support after software deployment : Your software has gone live and in in the production environment. The project gets handed over to the IT support team.
Question - Contribution Margin Ratio : If the contribution margin ratio for Vera Company is 40%, sales were $3,400,000, and fixed costs were $800,000, what was the income from operations
Detective and preventative measures : Ideally, an organization can avoid incidents completely by implementing preventive countermeasures.
Determine the number of new customer accounts : Question - Break-Even Analysis - Determine the number of new customer accounts needed to break even on the cost of the promotional campaign
Identify emerging crime issue in community : Identify an emerging crime issue in your community using data available from sources such as local newspapers, online police reporting,
Implication of the risks to company operations : What are risks that companies face because of their information systems? What are the implication of the risks to a company's operations?
Balance scorecard for okanagan orchard products : Create a balance scorecard for Okanagan Orchard Products Limited using the traditional four perspectives - What specific measures could Okanagan
Guess the type of interview : Guess the type of interview, also form questions?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd