Multiple-Level Break-Even Analysis Kucera Associates provides marketing services for a number of small manufacturing firms. Kucera receives a commission of 10 percent of sales. Operating costs are as follows: Unit-level costs $ 0.05 per sales dollar Sales-level costs $ 400 per sales order Customer-level costs $1,000 per customer per year Facility-level costs $75,000 per year (a) Determine the minimum order size in sales dollars for Kucera to break even on an order. $ 8,000 (b) Assuming an average customer places five orders per year, determine the minimum annual sales required to break even on a customer. $ 30,000 x (c) What is the average order size in (b)? $ 6,000 x (d) Assuming Kucera currently serves 100 customers, with each placing an average of five orders per year, determine the minimum annual sales required to break even. $ 3,000 (e) What is the average order size in (d)? $ 6,000
Multiple-Level Break-Even Analysis Kucera Associates provides marketing services for a number of small manufacturing firms. Kucera receives a commission of 10 percent of sales. Operating costs are as follows: Unit-level costs $ 0.05 per sales dollar Sales-level costs $ 400 per sales order Customer-level costs $1,000 per customer per year Facility-level costs $75,000 per year (a) Determine the minimum order size in sales dollars for Kucera to break even on an order. $ 8,000 (b) Assuming an average customer places five orders per year, determine the minimum annual sales required to break even on a customer. $ 30,000 x (c) What is the average order size in (b)? $ 6,000 x (d) Assuming Kucera currently serves 100 customers, with each placing an average of five orders per year, determine the minimum annual sales required to break even. $ 3,000 (e) What is the average order size in (d)? $ 6,000
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....
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