Janice owns the Cute Cut Salon. She employs 5 stylists and pays each a base salary of

Question:

Janice owns the Cute Cut Salon. She employs 5 stylists and pays each a base salary of $1,800 per month. One of the stylists serves as the manager, receiving an extra $500 per month. In addition to the base salary, each stylist receives a commission of $5 per haircut. Each stylist can do as many as 25 haircuts a day, but the average is 17 haircuts each per day. The Cute Cut Salon is open an average of 24 days per month. Other financial information is as follows:
Janice owns the Cute Cut Salon. She employs 5 stylists

Required:
Compute the monthly break-even point for the following:
a. Number of haircuts. (Do not round intermediate calculations. Round up your answer to the next whole number.)
b. Total sales dollars. (Round up "Break-even number of haircuts" to the next whole number. Do not round other intermediate calculations.)
c. As a percentage of maximum capacity. (Round your percentage answer to the nearest whole percentage, (i.e., 0.123 should be considered as 12%).)

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Related Book For  book-img-for-question

Introduction to Managerial Accounting

ISBN: 978-1259103261

4th Canadian edition

Authors: Peter C. Brewer, Ray H Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan

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