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P5-1B The Sasoon Barber Shop employs four barbers. One barber, who also serves as the manager, is paid a salary of $3,000 per month.
P5-1B The Sasoon Barber Shop employs four barbers. One barber, who also serves as the manager, is paid a salary of $3,000 per month. The other barbers are paid $1,500 per month. In addition, each barber is paid a commission of $3 per haircut. Other monthly costs are store rent $700 plus 60 cents per haircut, depreciation on equipment $400, barber supplies 40 cents per haircut, utilities $300, and advertising $100. The price of a haircut is $10. Instructions (a) Determine the variable costs per haircut and the total monthly fixed costs. P5-2B All Frute Company bottles and distributes Frute Ade, a fruit drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 70 cents per bot- tle. For the year 2017, management estimates the following revenues and costs. Sales Direct materials $2,500,000 360,000 Direct labor 450,000 Manufacturing overhead- Selling expenses-variable Selling expenses-fixed Administrative expenses- variable $ 80,000 250,000 40,000 variable 270,000 Manufacturing overhead- Administrative expenses- fixed 150,000 fixed 380,000 Instructions (a) Prepare a CVP income statement for 2017 based on management's estimates. (Show column for total amounts only.)
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