Hey! I had a question on this case study. Please see attached document. If anyone could complete it or show me how that would be great.

ACC 112, Fall, 2016 Rebman CVP Case This case analysis is an evaluation of a hair salon and spa. The focus of this analysis is on the accounting perspective using the Cost-Volume-Profit model. While the CVP model is not the only way to evaluation a business, it does have a meaningful role in business decision making. This case will be worth 100 points. Required. Prepare a written report to Ms. Lindenbaum (your client) that will help her to decide whether or not to start this business and to evaluate the following two options: 1. Operate the basic business as discussed in the Background Information, 2. Operate the business but on a larger scale as described in the Larger Scale Information below. Your report should contain two sections: Basic Business Model and Larger Scale Option. * In the section covering the Basic Business Model, cover the following points: 1. Identify which costs are fixed costs and which costs are variable costs. 2. Prepare a break-even analysis to calculate the number of services that have to be performed and the total revenue at that volume to: a) break even and b) earn an operating profit of $35,000 per year. You will need to calculate the total number of services and the number of each type of service using the sales mix information. 3. Prepare a cost-volume-profit graph. Be sure to label the lines, the axis, and the break-even point. This should be presented on a separate page in your report, rather than in the body of the report for easier reference by your client. 4. Prepare a summary explaining your findings. Be sure to explain the difference between fixed and variable costs, explain what the break-even point represents and why it is important, what the contribution margin is, and address any other points that you feel are important from a managerial accounting perspective. * In the section covering the Expanded Salon Option, cover the following points: 1. Explain what this option does to selling price, variable costs, and fixed costs (i.e. increase or decrease and by how much). 2. Prepare another break-even analysis to calculate the number of services that have to be performed to: a) break even and b) earn an operating profit of $35,000 per year. 3. Your recommendation as to whether or not she should take this option. Be sure to explain your reasoning and comment on the increase in volume needed if she chooses this option. qattachments_6a93294541d912ffc19155d888cdfda8b78fab37.docx * While this is not a class in composition, written communication in business is important. (This is discussed by employers constantly!) Your report should be well organized, it should be free from grammatical and spelling errors, and it should be concise and focused so that the reader can clearly see your recommendations and ideas without having to jump around through the body of the text. Length is not important, but you need to be sure that you address each of the points above. Remember that you are presenting this report to your client. It does not need to be in a plastic cover, but it does need to be typed, and a cover page will give it a professional appearance. This is an individual project, not a group project, so while working together is good, each person has to submit her/his own report. The reports will be submitted to D2L Dropbox, so do not plagiarize. If you cannot get your graph into your document, you can upload the graph separately into the dropbox. Grading is based on accuracy of calculations and on the quality of the report. A rubric has been posted in D2L for your reference. qattachments_6a93294541d912ffc19155d888cdfda8b78fab37.docx Background Information. Your client is planning to start her own hair salon. She has been a stylist for several years, and she feels that this is a good time for her to open her own salon. She has identified a space in a small strip shopping mall that would be suitable for the business and her clients. Basic Business Model. Following are some data regarding costs for the basic business: SERVICES: Wash, cut & blow dry Wash, cut & style Wash, cut & color Retail product sales Price per service $35 $55 $95 $25 Product Mix % 20% 40% 35% 5% Costs are expected to be as follows: Stylists will be paid on a straight commission at 40% of revenue. (Stylists are paid for the hair-related services, not the retail sales.) One shampoo person will be employed at a salary of $1,400 per month One person will be employed to work at the front counter at a salary of $1,300 per month Rent on the shop will be $1,200 per month Insurance will cost $3,000 per year Shop equipment costs will be $3,600 per year Telephone and utilities are not expected to vary with volume and will run $650 per month Supplies (shampoo, conditioner, colors, combs, etc) are expected to be 10% of revenue for the hair-related services General supplies (office supplies, coffee, decorations, etc) and maintenance for the salon will be $400 per month Bank and credit card processing fees will be 2% of sales. This applies to all sales. The cost of goods for the retail sales are approximately 55% of the sales price. Note that the \"price per service\" shown above is the average amount per sale. Note that some of these costs are shown per month and some are shown per year. qattachments_6a93294541d912ffc19155d888cdfda8b78fab37.docx Expanded Salon Option. Another option that the owner is considering is to operate at a larger scale. Under this option, she will open her salon in a larger shopping mall. The main difference is that the salon will be larger, which will provide enough space for an expanded retail sales area and a space for manicures and pedicures. Also, the mall location will attract more clients. The plan is that although the rent will be higher, there will be enough of an increase in volume to more than cover the higher operating costs. Revised revenue information is as follows: SERVICES: Wash, cut & blow dry Wash, cut & style Wash, cut & color Manicures, pedicures Retail product sales Price per service $35 $55 $95 $45 $25 Product Mix % 15% 30% 25% 10% 20% Changes to the cost data are as follows: Additional hours will be needed for the front counter. The salary cost will now be $2,800 per month Rent on the shop will be $3,300 per month Insurance will cost $5,000 per year Shop equipment costs will be $7,200 per year General supplies (office supplies, coffee, decorations, etc) and maintenance for the salon will be $600 per month The nail technician will be paid at the same rate as the stylists Nail supplies will be 10% of manicure, pedicure revenue Commissions will now be paid on retail sales at a rate of 10% of the sales amount qattachments_6a93294541d912ffc19155d888cdfda8b78fab37.docx