Question
Ivanhoe Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base rate of $1,330 per month. One of the barbers
Ivanhoe Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base rate of $1,330 per month. One of the barbers serves as the manager and receives an extra $535 per month. In addition to the base rate, each barber also receives a commission of $5.90 per haircut. Other costs are as follows.
Advertising | $290 | per month | |
Rent | $910 | per month | |
Barber supplies | $0.40 | per haircut | |
Utilities | $175 | per month plus $0.20 per haircut | |
Magazines | $20 | per month |
Ivanhoe currently charges $13 per haircut.
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 | $enter a dollar amount rounded to 2 decimal places | |
---|---|---|
Total fixed | $enter a dollar amount |
Compute the break-even point in units and dollars.
Break-even point | enter the Break-even point in units | haircuts | |
Break even sales | $enter the Break-even sales in dollars |
eTextbook and Media
Determine net income, assuming 1,800 haircuts are given in a month.
Net income / (Loss) | $enter net income in dollars |
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