Mark Diesel owns the Fredonia Barber Shop. He employs 7 barbers and pays each a base salary of $1,200 per month. One of the barbers serves as the manager and receives an extra $560 per month. In addition to the base salary, each barber also receives a commission of $6.10 per haircut. Other costs are as follows. Advertising $270 per month Rent $970 per month Barber supplies $0.40 per haircut Utilities $175 per month plus $0.10 per haircut Magazines $20 per month Mark currently charges $12.00 per haircut. Determine the unit variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, e.g. 2.25.) Total unit variable cost per haircut $enter total variable cost per haircut rounded to 2 decimal places in dollars Total fixed costs $enter total fixed cost in dollars
Mark Diesel owns the Fredonia Barber Shop. He employs 7 barbers and pays each a base salary of $1,200 per month. One of the barbers serves as the manager and receives an extra $560 per month. In addition to the base salary, each barber also receives a commission of $6.10 per haircut. Other costs are as follows. Advertising $270 per month Rent $970 per month Barber supplies $0.40 per haircut Utilities $175 per month plus $0.10 per haircut Magazines $20 per month Mark currently charges $12.00 per haircut. Determine the unit variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, e.g. 2.25.) Total unit variable cost per haircut $enter total variable cost per haircut rounded to 2 decimal places in dollars Total fixed costs $enter total fixed cost in dollars
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mark Diesel owns the Fredonia Barber Shop. He employs 7 barbers and pays each a base salary of $1,200 per month. One of the barbers serves as the manager and receives an extra $560 per month. In addition to the base salary, each barber also receives a commission of $6.10 per haircut.
Other costs are as follows.
| Advertising | $270 | per month | |
| Rent | $970 | per month | |
| Barber supplies | $0.40 | per haircut | |
| Utilities | $175 | per month plus $0.10 per haircut | |
| Magazines | $20 | per month |
Mark currently charges $12.00 per haircut.
Determine the unit variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, e.g. 2.25.)
| Total unit variable cost per haircut |
$enter total variable cost per haircut rounded to 2 decimal places in dollars
|
|
|---|---|---|
| Total fixed costs |
$enter total fixed cost in dollars
|
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