Mr. Jack Smith owns the Smith Barber Shop. He employs 5 barbers and pays them each a base rate of $ 1000/month. One Barbers serves as a manager and receives an extra $500/month. In addition to the base rate, each barber also receives a commission of $5/haircut. Other Costs are as follows: Advertising $ 750/month Rent $ 2,400/month Barber Supplies $ 0.6/haircut Utilities $ 225/month plus $ 0.4/haircut Magazines $ 125/month The Barber currently charges $ 15/haircut Instructions:

a. Determine the total Variable cost and Fixed Cost.

b. Determine the break-even point in units and dollars.

c. Determine the sales required in units and dollars if the company wants to have Net Income $ 1,125. d. Prepare a CVP Income Statement if the actual sales for January is 1,800 units.

e. Compute the Margin of Safety Ratio.