Question
Debras Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Debras offers 15-minute haircuts for harried
Debras Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Debras offers 15-minute haircuts for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickly, she schedules her 5 employees based on expected client traffic. Each of the employees is paid $ 1220 per month, with part of their pay coming from client tips. Debra pays rent and overhead costs of $ 2200 per month on the facility. Because of the quick nature of the service, Debra doesnt have time to clean combs in between clients, so she uses a new comb for each customer, at a cost of $ 0.65 each. She also provides shampoo and conditioner for each client at a cost of $ 1.10 per client. The average price for a haircut is $ 14. Debra pays herself $ 5700 per month. What is Debras contribution margin per haircut?
$ 12.25
$ 12.90
$ 11.95
$ 13.35
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