Nielsen Associates provides marketing services for a number of small manufacturing firms. Nielsen receives a commission of 10 percent of sales. Operating costs are as follows: Unit-level costs $0.02 per sales dollar Sales-level costs $300 per sales order Customer-level costs $600 per customer per year Facility-level costs $60,000 per year (a) Determine the minimum order size in sales dollars for Nielsen to break even on an order. $ 0 (b) Assuming an average customer places five orders per year, determine the minimum annual sales required to break even on a customer. $ 0 (c) What is the average order size in (b)? $ 0 (d) Assuming Nielsen currently serves 100 customers, with each placing an average of five orders per year, determine the minimum annual sales required to break even. $ 0 (e) What is the average order size in (d)?
Nielsen Associates provides marketing services for a number of small manufacturing firms. Nielsen receives a commission of 10 percent of sales. Operating costs are as follows: Unit-level costs $0.02 per sales dollar Sales-level costs $300 per sales order Customer-level costs $600 per customer per year Facility-level costs $60,000 per year (a) Determine the minimum order size in sales dollars for Nielsen to break even on an order. $ 0 (b) Assuming an average customer places five orders per year, determine the minimum annual sales required to break even on a customer. $ 0 (c) What is the average order size in (b)? $ 0 (d) Assuming Nielsen currently serves 100 customers, with each placing an average of five orders per year, determine the minimum annual sales required to break even. $ 0 (e) What is the average order size in (d)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Multiple-Level Break-Even Analysis
Nielsen Associates provides marketing services for a number of small manufacturing firms. Nielsen receives a commission of 10 percent of sales. Operating costs are as follows:
Unit-level costs
$0.02 per sales dollar
Sales-level costs
$300 per sales order
Customer-level costs $600 per customer per year
Facility-level costs
$60,000 per year
(a) Determine the minimum order size in sales dollars for Nielsen to break even on an order.
$ 0
(b) Assuming an average customer places five orders per year, determine the minimum annual sales required to break even on a customer.
$ 0
(c) What is the average order size in (b)?
$ 0
(d) Assuming Nielsen currently serves 100 customers, with each placing an average of five orders per year, determine the minimum annual sales required to break even.
$ 0
(e) What is the average order size in (d)?
$ 0
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