Janice owns the Cute Cut Salon. She employs five stylists and pays each a base salary of $1,500 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 $6 per haircut. Each stylist can do as many as 20 haircuts a day, but the average is 14 haircuts each per day. The Cute Cut Salon is open an average of 24 days per month. Other financial information is as follows:

Advertising . . . . . . . . . . . . $500 per month
Rent . . . . . . . . . . . . . . . . . . $1,000 per month
Supplies . . . . . . . . . . . . . . . $1.50 per haircut
Utilities. . . . . . . . . . . . . . . . $300 per month plus $0.50 per haircut
Magazines . . . . . . . . . . . . . $50 per month
Cleaning supplies . . . . . . . $0.25 per haircut
Price per haircut . . . . . . . . $15

Required:

1. Compute the monthly break-even point

a. For the number of haircuts.

b. For the total sales dollars.

c. As a percentage of maximum capacity.

2. In February, 1,500 haircuts were given. Compute the net income for February.

3. If Janice would like a $4,000 monthly profit, compute the number of haircuts that must be given per month to achieve this profit.

4. In March, 1,600 haircuts were given. Assuming demand is sufficient, would it be possible for stylists to give enough haircuts in April to achieve a monthly average profit equal to the target profit of $4,000?

Consider only the two-month period of March and April.