Final answer:
Cost-volume profit analysis is a tool used by businesses to understand the relationship between costs, volume, and profit. To analyze Star Stream's cost-volume profit relationships, you would need to gather information on fixed and variable costs, subscription fees, and the number of subscribers. Cost-volume profit analysis techniques can then be used to determine the breakeven point and contribution margin.
Step-by-step explanation:
Cost-volume profit analysis is a tool used by businesses to understand the relationship between costs, volume, and profit. It helps businesses determine the level of sales needed to cover costs and make a profit.
In the case of Star Stream, a subscription based video streaming service, the cost-volume profit relationship can be analyzed by considering the costs associated with providing the service, the number of subscribers, and the subscription fees.
To analyze Star Stream's cost-volume profit relationships, you would need to gather the following information:
- Fixed costs: These are costs that do not change regardless of the number of subscribers. Examples include infrastructure costs, employee salaries, and software licensing fees.
- Variable costs: These costs vary with the number of subscribers. Examples include content licensing fees and customer acquisition costs.
- Subscription fees: The revenue generated from the subscription fees charged to subscribers.
- Number of subscribers: The total number of subscribers to the Star Stream service.
Once you have this information, you can use cost-volume profit analysis techniques, such as calculating the breakeven point and determining the contribution margin, to understand the relationship between costs, volume, and profit.