Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

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 ratio?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions