PLEASE SOLVE

Your research outcomes came as follow: To penetrate the market, you believe that a price of 25.00 AED per smoothy is appropriate. The cost of materials and ingredients to prepare the smoothies: Ingredients Amount needed per cup Milk ( 20 AED for 1 gallon) 80 gm per smoothie Plain yogurt (12AED for 2kg) 80 gm per smoothie Sugar (30 AED for 10kg) 8 gm per smoothie Fruits assorted (100AED for 5kg) 80 gm per smoothie Edible cups (2AED per cup) 1 cup per smoothie Straws (20 AED for 500) 1 pcs per smoothie . . I . Initial Costs: Equipment: Smoothie blender: 1080 AED per machine x 3 machines $3240 expected life is 2 years Equipment: Refrigerator/freezer: AED 2400. Expected life is 10 years. Tables for customers to sit outside: 540 per set x 5- 2700AED. Expected life is 3 years Countertops: 1200AED. Expected life is 10 years Booth rental: 2000AED a month Cleaning and other miscellaneous supplies: 200AED a month Sign for the booth 440 AED Total Initial Costs = 12,180AED. Between you and your friend and a support from your parents you managed to have the required fixed cost covered for the first 3 months. Total investments by owners 60,000 AED. Employees: To run the business, you and your partner will take turns working with two other part-time employees, the monthly salary for each will be 1,200AED per month. Other costs: Direct materials costs will be covered by the owner's capital, Required: To answer the questions below, you will need to make assumptions, and add/change fixed and variable costs (please clearly indicate all assumptions made). 1) Using the information above you need to determine how many smoothies you will need to sell to break even. (For simplicity keep all costs on monthly basis throughout your analysis), 2) How much salary can you take for yourself and your partner friend and how many smoothies you need to sell to break even. 3) Should you leave your job to open the Smoothie shack? ANSWERS TO THE CASE I Fixed costs: those that stay the same when the volume of activity changes Monthly fixed costs Amount Total monthly fixed cost Your research outcomes came as follow: To penetrate the market, you believe that a price of 25.00 AED per smoothy is appropriate. The cost of materials and ingredients to prepare the smoothies: Ingredients Amount needed per cup Milk ( 20 AED for 1 gallon) 80 gm per smoothie Plain yogurt (12AED for 2kg) 80 gm per smoothie Sugar (30 AED for 10kg) 8 gm per smoothie Fruits assorted (100AED for 5kg) 80 gm per smoothie Edible cups (2AED per cup) 1 cup per smoothie Straws (20 AED for 500) 1 pcs per smoothie . . I . Initial Costs: Equipment: Smoothie blender: 1080 AED per machine x 3 machines $3240 expected life is 2 years Equipment: Refrigerator/freezer: AED 2400. Expected life is 10 years. Tables for customers to sit outside: 540 per set x 5- 2700AED. Expected life is 3 years Countertops: 1200AED. Expected life is 10 years Booth rental: 2000AED a month Cleaning and other miscellaneous supplies: 200AED a month Sign for the booth 440 AED Total Initial Costs = 12,180AED. Between you and your friend and a support from your parents you managed to have the required fixed cost covered for the first 3 months. Total investments by owners 60,000 AED. Employees: To run the business, you and your partner will take turns working with two other part-time employees, the monthly salary for each will be 1,200AED per month. Other costs: Direct materials costs will be covered by the owner's capital, Required: To answer the questions below, you will need to make assumptions, and add/change fixed and variable costs (please clearly indicate all assumptions made). 1) Using the information above you need to determine how many smoothies you will need to sell to break even. (For simplicity keep all costs on monthly basis throughout your analysis), 2) How much salary can you take for yourself and your partner friend and how many smoothies you need to sell to break even. 3) Should you leave your job to open the Smoothie shack? ANSWERS TO THE CASE I Fixed costs: those that stay the same when the volume of activity changes Monthly fixed costs Amount Total monthly fixed cost