Question
Nancy's Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Nancy's offers 15-minute haircuts for harried
Nancy's Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Nancy's 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 $ 1210 per month, with part of their pay coming from client tips. Nancy pays rent and overhead costs of $ 2400 per month on the facility. Because of the quick nature of the service, Nancy doesn't have time to clean combs in between clients, so she uses a new comb for each customer, at a cost of $ 0.50 each. She also provides shampoo and conditioner for each client at a cost of $ 0.90 per client. The average price for a haircut is $ 14. Nancy pays herself $ 5000 per month. What is Nancy's contribution margin per haircut?
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