Nielsen Associates provides marketing services for a number ofsmall manufacturing firms. Nielsen receives a...

50.1K

Verified Solution

Question

Accounting

Nielsen Associates provides marketing services for a number ofsmall manufacturing firms. Nielsen receives a commission of 10percent of sales. Operating costs are as follows: Unit-level costs$0.02 per sales dollar Sales-level costs $200 per sales orderCustomer-level costs $800 per customer per year Facility-levelcosts $60,000 per year
(a) Determine the minimum order size in sales dollars forNielsen to break even on an order.
(b) Assuming an average customer places five orders per year,determine the minimum annual sales required to break even on acustomer.
(c) What is theaverage order size in (b)?
(d) Assuming Nielsen currently serves 100 customers, with eachplacing an average of five orders per year, determine the minimumannual sales required to break even.

Answer & Explanation Solved by verified expert

4.4 Ratings (635 Votes)

SOLUTION A Lets assume X is the minimum order size X 200 002X 098 X 200 X 200098 Minimum Order Size 20408 B Assuming an average customer places five orders per year determine the minimum annual sales required to break See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In: AccountingNielsen Associates provides marketing services for a number ofsmall manufacturing firms. Nielsen receives a commission...Nielsen Associates provides marketing services for a number ofsmall manufacturing firms. Nielsen receives a commission of 10percent of sales. Operating costs are as follows: Unit-level costs$0.02 per sales dollar Sales-level costs $200 per sales orderCustomer-level costs $800 per customer per year Facility-levelcosts $60,000 per year(a) Determine the minimum order size in sales dollars forNielsen to break even on an order.(b) Assuming an average customer places five orders per year,determine the minimum annual sales required to break even on acustomer.(c) What is theaverage order size in (b)?(d) Assuming Nielsen currently serves 100 customers, with eachplacing an average of five orders per year, determine the minimumannual sales required to break even.