Laura's Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Laura's offers 15-minute haircuts for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickly, she schedules her 5 employees based on expected client traffic. Each of the employees is paid $1270 per month, with part of their pay coming from client tips. Laura pays rent and overhead costs of $2200 per month on the facility. Because of the quick nature of the service, Laura doesn't have time to clean combs in between clients, so she uses a new comb for each customer, at a cost of $0.70 each. She also provides shampoo and conditioner for each client at a cost of $1.10 per client. The average price for a haircut is $14. Laura pays herself $5300 per month. What is Laura's contribution margin per haircut?
Laura's Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Laura's offers 15-minute haircuts for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickly, she schedules her 5 employees based on expected client traffic. Each of the employees is paid $1270 per month, with part of their pay coming from client tips. Laura pays rent and overhead costs of $2200 per month on the facility. Because of the quick nature of the service, Laura doesn't have time to clean combs in between clients, so she uses a new comb for each customer, at a cost of $0.70 each. She also provides shampoo and conditioner for each client at a cost of $1.10 per client. The average price for a haircut is $14. Laura pays herself $5300 per month. What is Laura's contribution margin per haircut?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Laura's Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Laura's offers 15-minute haircuts
for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickly, she schedules
her 5 employees based on expected client traffic. Each of the employees is paid $1270 per month, with part of their pay coming from
client tips. Laura pays rent and overhead costs of $2200 per month on the facility. Because of the quick nature of the service, Laura
doesn't have time to clean combs in between clients, so she uses a new comb for each customer, at a cost of $0.70 each. She also
provides shampoo and conditioner for each client at a cost of $1.10 per client. The average price for a haircut is $14. Laura pays herself
$5300 per month. What is Laura's contribution margin per haircut?
O $13.30
O $12.20
O $12.90
O $11.90](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8665c90a-e228-4cf6-bf60-57dab8fd52d5%2F840879be-5eb4-43cb-b1c9-b90c89a680ab%2Fb6sjah8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Laura's Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Laura's offers 15-minute haircuts
for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickly, she schedules
her 5 employees based on expected client traffic. Each of the employees is paid $1270 per month, with part of their pay coming from
client tips. Laura pays rent and overhead costs of $2200 per month on the facility. Because of the quick nature of the service, Laura
doesn't have time to clean combs in between clients, so she uses a new comb for each customer, at a cost of $0.70 each. She also
provides shampoo and conditioner for each client at a cost of $1.10 per client. The average price for a haircut is $14. Laura pays herself
$5300 per month. What is Laura's contribution margin per haircut?
O $13.30
O $12.20
O $12.90
O $11.90
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