Question

Vin Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base rate of $1,640 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 $5.96 per haircut.

Problem 18-1A Vin Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base rate of $1,640 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 $5.96 per haircut. Other casts are as follows. Advertising Rent Barber supplies Utilities Magazines $280 per month $990 per month $0.47 per haircut $175 per month plus $0.35 per haircut $25 per month Vin currently charges $11.78 per haircut. 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 haircuts Total fixed LINK TO TEXT VIDEOI SIMILAR PROBLEM Compute the break-even point in units and dollars. (Round answers to o decimal places, e.g. 1,225.) Break-even point haircuts Break-even points LINK TO TEXT VIDEO: SIMILAR PROBLEM Determine net income, assuming 2,490 haircuts are given in a month. (Round answer to O decimal places, e.g. 1,225.) Net Income / (Loss) LINK TO TEXT VIDEO: SIMILAR PROBLEM

Answer 1

a) Total variable cost per haircut = $6.78 per haircut

Total Fixed cost = 10190

b) Break even unit = 10190/(11.78-6.78) = 2038 Haircut

Break even sales = 2038*11.78 = $24008

c) Net income (loss) = (11.78-6.78)*2490-10190 = 2260