Solution-Determine the minimum annual sales required to

Determine the minimum annual sales required to break even

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Reference no: EM132748734

Problem - 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 $100 per sales order

Customer-level costs $800 per customer per year

Facility-level costs $60,000 per year

Required -

(a) Determine the minimum order size in sales dollars for Nielsen to break even on an order.

(b) Assuming an average customer places four orders per year, determine the minimum annual sales required to break even on a customer.

(d) Assuming Nielsen currently serves 100 customers, with each placing an average of four orders per year, determine the minimum annual sales required to break even.

(e) What is the average order size in (d)?

Reference no: EM132748734

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Determine the minimum annual sales required to break even

Reference no: EM132748734

Reference no: EM132748734

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