Joe Vida owns the Peace Barber simple . He employs five barbers and pays each a base rate of $1,200 per month. One of the barbers serves as the manage) and receives an extra $600 per month. In addition to the base rate, each barber also receives a commission of $3.50 per haircut.

Other costs are as follows.

Joe current charges $10 per haircut.

Instructions

(a) Determine the variable cost per haircut and the total month!) fixed costs.

(b) Compute the break-even point in units and dollars.

(c) Prepare a CVP graph, assuming a maximum of 1,800 haircuts in a month. Use increments of 300 haircuts on the horizontal axis and $3,000 on the vertical axis.

(d) Determine net income, assuming 1,500 haircuts are given in a month.

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Advertising Rent Barber supplies Utilities Magazines $200 per month $800 per month $0.30 per haircut $175 per month plus $0.20 per haircut $25 per month