21-11. for the Current Year Ending March 31,Jwork Company Expects Fixed Costs of $440,000

21-11. For the current year ending March 31,Jwork Company expects fixed costs of $440,000, a unit variable cost of $50,and a unit selling price of $75. a. Compute the anticipated break-even sales (units). b. Compute the sales (units) required to realize income from operations of $90,000.

a. Break-Even Sales (units) =

Break-Even Sales (units) = = 17,600 units

b. Sales (units) =

Sales (units) = = 21,200 units

21-13. Currently, the unit selling price of a product is $280,the unit variable cost is $230,and the total fixed costs are $525,000.A proposal is being evaluated to increase the unit selling price to $300. a. Compute the current break-even sales (units). b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant.

a. Break-Even Sales (units) =

Break-Even Sales (units) = = 10,500 units

b. Break-Even Sales (units) =

Break-Even Sales (units) = = 7,500 units

21-16. Sprint Nextelis one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 41.5 million direct subscribers (accounts) that generated revenue of $40,146 million.Costs and expenses for the year were as follows (in millions): Cost of revenue $17,191 Selling, general, and administrative expenses 12,673 Depreciation 5,711 Assume that 75% of the cost of revenue and 35% of the selling, general, and adminis- trative 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 assump- tions above? Round units to one decimal place (in millions). b. How much revenue per account would be sufficient for Sprint Nextel to break even if the number of accounts remained constant?

a. Break-Even =

Break-Even =

Break-Even = 33.2 million (rounded) accounts

1Revenue per account (in millions):

$40,146/41.5 = $967 (rounded)

2Variable cost per account (in millions):

Cost of revenue $17,191 × 75% = $ 12,893.3

Selling, general, and administrative

expenses 12,673 × 35% 4,435.6

Total variable cost $ 17,328.9

Divided by number of accounts ÷ 41.5

Variable cost per account (rounded) $ 418

3Fixed costs (in millions):

Cost of revenue $17,191 × 25% $ 4,297.8

Selling, general, and administrative

expenses 12,673 × 65% 8,237.5

Depreciation 5,711 × 100% 5,711.0

Total fixed costs $ 18,246.3

b. Break-Even =

41.5 accounts =

41.5X – $17,347 = $18,246.3

41.5X = $35,593.3

X = $858 (rounded)