Determine the variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, eg. 2.25.) Total variable cost per haircut 2$ Total fixed Compute the break-even point in units and dollars. Break-even point haircuts Break even sales Determine net income, assuming 2.000 haircuts are given in a month. Net income/(Loss)
Determine the variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, eg. 2.25.) Total variable cost per haircut 2$ Total fixed Compute the break-even point in units and dollars. Break-even point haircuts Break even sales Determine net income, assuming 2.000 haircuts are given in a month. Net income/(Loss)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Crane Diesel owns the Fredonia Barber Shop. He employs 7 barbers and pays each a base rate of $1,310 per month. One of the
barbers serves as the manager and receives an extra $560 per month. In addition to the base rate, each barber also receives a
commission of$5.85 per haircut.
Other costs are as follows.
Advertising
$300
per month
Rent
$950
per month
Barber supplies
$0.50
per haircut
$170 per month plus $0.15 per haircut
$30 per month
Utilities
Magazines
Crane currently charges $13 per haircut.
Determine the variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, eg. 2.25)
Total variable cost per haircut
Total fixed
Compute the break-even point in units and dollars.
Break-even point
haircuts
Break even seles
Transcribed Image Text:Crane currently charges $13 per haircut.
Determine the variable costs per haircut and the total monthly fixed costs. (Round varlable costs to 2 decimal places, eg. 225,)
Total variable cost per haircut
Total fixed
Compute the break-even point in units and dollars.
Break-even point
haircuts
Break even sales
Determine net income, assuming 2,000 haircuts are given in a month.
Net income/(Loss).
Attempts: 0 of 3 used
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Expert Solution
Step 1 Formulas used :
Total variable cost = Commission + supplies +utilities
Total fixed cost = Salary + advertising + rent + utilities + magazines
Contribution margin = sales - variable cost
Contribution margin ratio = Contribution margin / sales
Break even point = Total fixed cost / Contribution margin
Break even sales = Total fixed cost / Contribution margin ratio
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