The city of mirada wants to offer cable television to its

Reference no: EM13600055

The City of Mirada wants to offer cable television to its residents in 2009. The city has approached a company called CableVision to run its cable operations. After negotiating with key parties, CableVision has made the following agreements:

Mirada will offer its residents a basic set of 25 cable television stations at a rate of $30.49 per month (all of the revenue will go to CableVision).

The City of Mirada will maintain the physical facilities, and CableVision will pay the city $90,000 per month plus $3.25 per cable subscriber per month.

CableVision will actually pay another company to broadcast the 25 channels and will pay this company an annual fixed fee of $730,000 plus a monthly amount of $8.50 per cable subscriber per month.

CableVision will incur additional operating costs for billing, program news mailings, etc. These costs will include a fixed component of $120,000 per month, and a variable component of 7.5% of monthly revenue.

QUESTION:

CableVision is considering offering a premium package of 35 channels for $43.99 per month. If they do, all variable and fixed cost parameter values will remain the same. CableVision estimates that 20% of its subscribers will purchase the premium package. If CableVision offers the premium package, what is the estimated average monthly contribution margin per subscriber?

Reference no: EM13600055

Questions Cloud

When only two treatments are involved anova and the student : when only two treatments are involved anova and the student t test chapter 11 result in the same conclusions. also . as

The city of mirada wants to offer cable television to its : the city of mirada wants to offer cable television to its residents in 2009. the city has approached a company called

Us pump is multidivisional firm tha manufactures and : u.s. pump is multidivisional firm tha manufactures and installs chemical piping and pump systmes. the valve division

Calculate cost of goods sold and ending inventory under the : sales 1600 units beginning inventory 500 units 4 purchases in chronilogical order 600 units 5 800 units 6 400 units 8

The city of mirada wants to offer cable television to its : the city of mirada wants to offer cable television to its residents in 2009. the city has approached a company called

Mares enterprises applies overhead using direct labor hours : mares enterprises applies overhead using direct labor hours. expected direct labor hours - 600000 actual direct labor

Explain the characteristics of integer programming : explain the characteristics of integer programming problems.give specific instances in which you would use an integer

A company had calculated net income to be 77550 based on : a company had calculated net income to be 77550 based on the unadjusted trial balance. the following adjusting journal

How much would the crow manufacturings total income from : assume that a transfer price of 110 has been established and that 40000 units of materials are transferred with no

User Account

All Pages