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 $6,001,600 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)----25 months
|
25 months
|
|
Revenue per month per customer subscription----$33
|
$33
|
|
Variable cost per month per customer subscription----$11
|
$11
|
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.?
________accounts
Job Costs
At the end of April, Kaye Company had completed Jobs 50 and 51. Job 50 is for 1,000 units, and Job 51 is for 500 units.
The following data relate to these two jobs:
On April 20, raw materials were requisitioned for production as follows: 300 units for Job 50 at $18 per unit and 1,200 units for Job 51 at $22 per unit.
During April, Kaye Company accumulated 400 hours of direct labor costs on Job 50 and 600 hours on Job 51. The total direct labor was incurred at a rate of $16 per direct labor hour for Job 50 and $14 per direct labor hour for Job 51.
The predetermined factory overhead rate is $8.00 per direct labor hour.
a. Determine the balance on the job cost sheets for Jobs 50 and 51 at the end of April.
|
Job 50
|
_______$
|
|
Job 51
|
_______$
|
b. Determine the cost per unit for Jobs 50 and 51 at the end of April. Round all answers to the nearest whole cent.
|
Job 50
|
_______$
|
|
Job 51
|
_______$
|