Question
Pharoah Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base rate of $1,580 per month. One of the barbers
Pharoah Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base rate of $1,580 per month. One of the barbers serves as the manager and receives an extra $555 per month. In addition to the base rate, each barber also receives a commission of $6.50 per haircut. Other costs are as follows.
Advertising | $260 | per month | |
Rent | $940 | per month | |
Barber supplies | $0.35 | per haircut | |
Utilities | $180 | per month plus $0.15 per haircut | |
Magazines | $35 | per month |
Pharoah currently charges $14 per haircut.
(a)
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Determine the variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, e.g. 2.25.)
Total variable cost per haircut | $ 7 | |
Total fixed | $ 9870 |
Attempts: 1 of 1 used
(b)
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Compute the break-even point in units and dollars.
Break-even point | 1410 | haircuts | |
Break even sales | $ | 19740 |
(d)
Determine net income, assuming 1,900 haircuts are given in a month.
Net income / (Loss) | $ |
**PLEASE ANSWER D**
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