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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
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: Unitlevel costs $0.02 per sales dollar Saleslevel costs $300 per sales order Customer-levei costs $600 per customer per year Facilitylevel costs $60,000 per year (a) Determine the minimum order size in sales dollars for Nielsen to break even on an order. $Answer o (b) Assuming an average customer places five orders per year, determine the minimum annual sales required to break even on a customer. $Answer 0
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