Cullumber Diesel owns the Fredonia Barber Shop. He employs 6 barbers and pays each a base rate of $1,600 per month. One of the barbers serves as the manager and receives an extra $520 per month. In addition to the base rate, each barber also receives a commission of $6.00 per haircut. Other costs are as follows.

Advertising		$220	per month
Rent		$970	per month
Barber supplies		$0.49	per haircut
Utilities		$180	per month plus $0.31 per haircut
Magazines		$30	per month

Cullumber currently charges $12.80 per haircut.

1 Determine the variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, e.g. 2.25.)

Total variable cost per haircut		$
Total fixed		$

2 Compute the break-even point in units and dollars.

Break-even point			haircuts
Break even sales		$

3 Determine net income, assuming 2,880 haircuts are given in a month.

Net income / (Loss)

$