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Dream Company is specialized in manufacturing a single type of perfume made from Rose scent. The general manager has hired you as a financial analyst

Dream Company is specialized in manufacturing a single type of perfume made from Rose scent. The general manager has hired you as a financial analyst in order to study the cost structure and provide the board of shareholders with pertinent recommendations. 

After careful investigation, you discovered that the variable cost per manufactured unit is at $40. Furthermore, the company incurs the following expenses: 

Rent: $10,000 

Electricity: $5,000 

Depreciation of the machines: $6,000 

Salary of administrative employees: $19,000 

Rose scent employed in the manufacturing process (variable cost): 100 liters at $400 per liter 

Each bottle of perfume consumes 50 ml (0.05 liter) of Rose scent


Requirements: 

1- Calculate the total fixed cost for Dream Company 

2- Find the produced quantity (in bottle) of perfumes 

3- In reality, the Dream Company has produced 2,000 bottles of perfume. Evaluate the minimum price P the company should sell one bottle of perfume in order to start realizing a net profit. 

4- The company decided to sell each bottle of perfume at $80 per unit. Draw in the same figure the sales and total cost (note: the x-laxis represents the quantity Q 

5- Given that selling price is P = $80 per bottle, evaluate the breakeven point (in quantity) for Dream Company.

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