Nancys Beauty Salon does mainly haircuts for men and small children. Each haircut is a unique job,

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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?

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Related Book For  book-img-for-question

Managerial Accounting An Integrative Approach

ISBN: 9780999500491

2nd Edition

Authors: C J Mcnair Connoly, Kenneth Merchant

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