9. Mohammed Al Harthi owns the Barber Shop. He employs five barbers and pays each a baserate of $2,000 per month. One of the barbers serves as the manager and receives an extra$1,000 per month. In addition to the base rate, each barber also receives a commission of$11.00 per haircut.Other costs are as follows.$400 per month$1,800 per month$0.60 per haircut$50 per monthAdvertisingRentBarber suppliesMagazinesUtilities $350 per month plus $0.40 per haircutMohammed currently charges $20 per haircut.Instructions(a) Determine the variable cost per haircut and the total monthly fixed costs.(b) Compute the break-even point in units and dollars.(c) Determine net income, assuming 3,800 haircuts are given in a month.(d) Determine the margin of safety with 3,800 haircuts

9. Mohammed AI Harthi owns the Barber Shop. He employs five barbers and pays each a base rate of $2,000 per month. One of the barbers serves as the manager and receives an extra $1,000 per month. In addition to the base rate, each barber also receives a commission of $11.00 per haircut. Other costs are as follows. Advertising $400 per month $1,800 per month $0.60 per haircut $50 per month Rent Barber supplies Magazines Utilities $350 per month plus $0.40 per haircut Mohammed currently charges $20 per haircut. Instructions (a) Determine the variable cost per haircut and the total monthly fixed costs. (b) Compute the break-even point in units and dollars. (c) Determine net income, assuming 3,800 haircuts are given in a month. (d) Determine the margin of safety with 3,800 haircuts

9. Mohammed AI Harthi owns the Barber Shop. He employs five barbers and pays each a base rate of $2,000 per month. One of the barbers serves as the manager and receives an extra $1,000 per month. In addition to the base rate, each barber also receives a commission of $11.00 per haircut. Other costs are as follows. Advertising $400 per month $1,800 per month $0.60 per haircut $50 per month Rent Barber supplies Magazines Utilities $350 per month plus $0.40 per haircut Mohammed currently charges $20 per haircut. Instructions (a) Determine the variable cost per haircut and the total monthly fixed costs. (b) Compute the break-even point in units and dollars. (c) Determine net income, assuming 3,800 haircuts are given in a month. (d) Determine the margin of safety with 3,800 haircuts

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Answer
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Kevin Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base salary of $1,440 per month. One of the barbers serves as the manager and receives an extra $565 per month. In addition to the base salary, each barber also receives a commission of $8.50 per haircut. Other costs are as follows. Advertising $250 per month Rent $1,100 per month Barber supplies $0.35 per haircut Utilities $150 per month plus $0.15 per haircut Magazines $35 per month Kevin currently charges $15.00 per haircut.
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