Question

Salon de Beauty, a local hair salon, incurred the following costs last month. (Hint: Treat Salon utilities as Variable Salon rent Salon utilities (electric and water) Hairstylists' salaries Hairstylists' commissions (a percentage of sales) Depreciation on fixtures and equipment Shampoo and conditioner (only a small amount is used on each customer) Insurance Advertising Store manager's salary $ 2.700 $ 990 $ 4,600 S 2,100 $ 840 S 340 $ 1,200 S 2,900 $ 3,300 S 400 Hair dye and perm kits (each dye job or perm uses one kit) Calculate each of the following, where the cost object is customers served: a. Total variable costs $3,830 b. Total fixed costs. $ 15,540 c. Total direct costs d. Total indirect costs Type here to search

Answer 1

Answer:

a. Total variable costs: $ 3,830
	Amount($)
Salon Utilities	990
Hair Stylist's Commission	2,100
Shampoo and Conditioner	340
Hair dye and perm kits	400
Total Variable Costs	3,830

b. Total Fixed Costs: $ 15,540
	Amount($)
Salon Rent	2,700
Hair Stylist's Salaries	4,600
Depreciation on fixtures and equipment	840
Insurance	1,200
Advertising	2,900
Store Manager's Salaries	3,300
Total Fixed Costs	15,540

c. Total direct costs:
Total direct cost	Amount($)
Hairstylists’ salaries	4,600
Salon utilities	990
Shampoo and conditioner	340
Hair dye and perm kits	400
Total direct cost	6,330

d. Total indirect cost:
Total indirect cost	Amount($)
Depreciation on fixtures and equipment	840
Insurance	1,200
Store manager’s salary	3,300
Advertising	2,900
Salon Rent	2,700
Hairstylists’ commissions	2,100
Total indirect cost	13,040

Note:

A direct cost is a price that can be completely attributed to the production of specific goods or services.

Hairstylists’ salaries are Directly attributerd to theService.