Question

Problem 6.40A a-bid The Peace Barber Shop employs four barbers. One barber, who also serves as the manager, is paid a salary of $1,830 per month. The other barbers are paid $1,300 per month. In addition, each barber is paid a comission of 2 per haircut. Other monthly costs are as follows store rent $10 plus 60 cents per haircuti depreciation on equipment $540, barber supplies 40 cents per haircut; uits $370; and advertising $250. The price of a haircut is $13. Determine the variable cost per haircut and the total monthly fixed costs. (Round variable cost to 2 decimal places, eg. 15.25.) Variable cost per haircut Total monthly Red costs Calculate the break-even point in units and dollars. Break-even Point Break-even Points Determine the operating income, assuming 1,500 haircuts are given in a month. Operating incomes

Answer 1

solution i ca) Sariable cost = commision to barber per hair cut + Rent per hair cut & Barber supplies per cart - 2 + 0.6to.u = $3 per haircut fised cost = manager salary &other basbersalaries + store rent toepreciation tutilities t advertising = 1830+ 1300x3 +810+suot 3704250 = $ 7700 per month (B) contribution a price - rasiable coff 13-3 - 10 & Break enen un fixedcost contribution = 7700_ = 770 hair cuts.

ll Breaks even sales in dollars = price & break even sabe, 2 133 770 = $ 10010 c) Income = Revenue - costs z price & units - fixed cost a price x variable cast = 13x1500 - 7700 - 13x8 2 $ '11761