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Joe Taslim owns the Peacock Hair Salon. He employs 4 hairdressers and pays each a base rate of $1.500 per month. One of the hairdressers
Joe Taslim owns the Peacock Hair Salon. He employs 4 hairdressers and pays each a base rate of $1.500 per month. One of the hairdressers serves as the manager and receives an extra $700 per month. In addition to the base rate, each hairdresser also receives a commission of $5.50 per haircut. Other costs are as follows. Advertising Rent Hairdresser Supplies Utilities Magazines $350 per month $950 per month $1.50 per haircut $250 per month plus $1.70 per haircut $35 per month Joe currently charges $25 per haircut. Instructions: a. Determine the variable cost per haircut and the total monthly fixed costs b. Compute the break-even point in units and dollars c. Prepare a CVP graph, assuming a maximum of 2.500 haircuts in a month. Use increments of 500 haircuts on the horizontal axis and $3.000 in the vertical axis d. Determine net income, assuming 2.300 haircuts are given in a month
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