Problem 18-2A a-b,d (Video)

Sheridan Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base rate of $1,460 per month. One of the barbers serves as the manager and receives an extra $510 per month. In addition to the base rate, each barber also receives a commission of $5.60 per haircut. Other costs are as follows.

Advertising		$230	per month
Rent		$960	per month
Barber supplies		$0.34	per haircut
Utilities		$180	per month plus $0.26 per haircut
Magazines		$20	per month

Sheridan currently charges $11.20 per haircut.

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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		$
Total fixed		$

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Compute the break-even point in units and dollars.

Break-even point			haircuts
Break even sales		$

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Determine net income, assuming 2,330 haircuts are given in a month.

Net income / (Loss)

$

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