Rotelco is one of the largest digital wireless service providers In the United States. In a recent year. It had approximately 100 direct subscribers that generated revenue of $48,500. Costs and expenses for the year were as follows:

Cost of Revenue: $21,800
Selling, general, and administrative expenses: $13,600
Depreciation: $5,300

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.

What is Rotelco's break-even number of accounts, using the data and assumptions above? 

How much revenue per account would be sufficient for Rotelco to break even if the number of accounts remained constant?

Answer rating: 100% (QA)

PART 1 First we have to calculate the contribution margin ... View the full answer