Question

Salon de Beauty, a local hair salon, incurred the following costs last month. (Hint: Treat Salon utilities as Variable cost) Salon rent $ 1,800 Salon utilities (electric and water) $ 810 Hairstylists’ salaries $ 5,500 Hairstylists’ commissions (a percentage of sales) $ 3,800 Depreciation on fixtures and equipment $ 810 Shampoo and conditioner (only a small amount is used on each customer) $ 270 Insurance $ 1,050 Advertising $ 2,300 Store manager’s salary $ 3,800 Hair dye and perm kits (each dye job or perm uses one kit) $ 390 c. Total direct costs. d. Total indirect costs.

Answer 1

		Direct Cost	Indirect Cost
1	Salon rent		1,800
2	Salon utilities (electric and water)		810
3	Hairstylists’ salaries		5,500
4	Hairstylists’ commissions	3,800
5	Depreciation on fixtures and equipment		810
6	Shampoo and conditioner	270
7	Insurance		1,050
8	Advertising		2,300
9	Store manager’s salary		3,800
10	perm kits	390
		4,460	16,070