Oriole Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base rate of $1,510 per month. One of the barbers serves as the manager and receives an extra $580 per month. In addition to the base rate, each barber also receives a commission of $8.40 per haircut.

Other costs are as follows.

Advertising		$300	per month
Rent		$1,020	per month
Barber supplies		$0.45	per haircut
Utilities		$150	per month plus $0.15 per haircut
Magazines		$30	per month

Oriole currently charges $18 per haircut.

a. Determine the variable costs per haircut and the total monthly fixed costs.

Total variable cost per haircut

Total fixed

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

Break-even point			haircuts
Break even sales		$

c. Determine net income, assuming 1,700 haircuts are given in a month.

Net income / (Loss)

$