Question

Question 3 Vin Diesel owns the Fredonia Barber Shop. He employs 6 barbers and pays each a base rate of $1,310 per month. One of the barbers serves as the manager and receives an extra $520 per month. In addition to the base rate, each barber also receives a commission of $5.90 per haircut. Other costs are as follows. Advertising Rent Barber supplies Utilities Magazines $280 per month $980 per month $0.38 per haircut $170 per month plus $0.27 per haircut $20 per month Vin currently charges $11.55 per haircut. v (a) Determine the variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, e.g. 2.25.) Total variable cost per haircut & Total fixed Click if you would like to Show Work for this question: Open Show Work

Answer 1

Ans. A 1	Particulars	Per unit
	Commission	$5.90
	Barber supplies	$0.38
	Utilities	$0.27
	Total variable cost per haircut	$6.55	per haircut
Ans. A 2	Particulars	Amount
	Barbers salary	$7,860
	Bonus to manager	$520
	Advertising	$280
	Rent	$980
	Utilities	$170
	Magazines	$20
	Total fixed cost	$9,830
	*Salary of one barber =   $1,310 per month.
	*Salary of 6 barbers =   $1,310 * 6   = $7,860 per month.
	*Utilities is a mixed cost that includes fixed and variable (both) component.
	*Total fixed cost remains constant in each month and variable cost per unit
	(haircut) changes as per the activity.