Nancys Beauty Salon does mainly haircuts for men and small children. Each haircut is a unique job,
Question:
Nancy’s Beauty Salon does mainly haircuts for men and small children. Each haircut is a unique job, but takes about the same amount of time to complete. Nancy charges $25 per haircut regardless of whether someone is going bald or has a full head of hair. Clearly, she gets very few bald customers! Below are Nancy ’s costs for running her business.
REQUIRED:
a. Complete the above chart, noting which costs are fixed and which are variable.
b. Develop a cost formula for Nancy. Be careful here because you want the costs for one haircut, not 100, right?
c. Develop a breakeven analysis for Nancy’s Beauty Salon in number of customers.
d. Develop a breakeven analysis for Nancy in dollars of revenue.
e. Nancy wants to make $5,000 per month before- tax profit. How many haircuts does she need to do now?
Step by Step Answer:
Managerial Accounting An Integrative Approach
ISBN: 9780999500491
2nd Edition
Authors: C J Mcnair Connoly, Kenneth Merchant