Break$-$Even Analysis

Media outlets 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 website. Assume that during a recent fiscal year, one outlet spent $$3,243,460$ on a promotional campaign for its 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$)$

Revenue per month per customer subscription

Variable cost per month per customer subscription

$26$ months

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.

$x$ accounts