The College Barber Shop employs four barbers. One barber, who also serves as the manager, is paid a salary of \($2,000\) per month. The other barbers are paid \($1,400\) per month. In addition, each barber is paid a commission of \($4\) per haircut. Other monthly costs are: store rent \($800\) plus 60 cents per haircut, depreciation on equipment \($500\), barber supplies 40 cents per haircut, utilities \($300\), and advertising \($200\). The price of a hair- cut is $10.

Instructions

(a) Determine the variable cost per haircut and the total monthly 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 \($3,000\) increments on the vertical axis.

(d) Determine the net income, assuming 1,800 haircuts are given in a month.