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:

UINIEIEWE GOSISS 65-4167 6 cheer eein eee eee $0.02 per sales dollar SEIS VECO: ssi hon Gece ee $200 per sales order GUSLOMENACVE! COSTS fees ce, 5 6 cuore nsv ee wales $1,000 per customer per year BACH IGVElGOStSieier ee, ec. Sie fant ow be $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.

c. What is the average order size in (b)?

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)?

jf. Explain the differences in the answers to (a), (c), and (e).