Problem 5-2A a-b,d (Video) (Part Level Submission)

Vin Diesel owns the Fredonia Barber Shop. He employs4barbers and pays each a base rate of $1,250per month. One of the barbers serves as the manager and receives an extra $500per month. In addition to the base rate, each barber also receives a commission of $4.50per haircut.

Other costs are as follows.

Advertising$200per monthRent$1,100per monthBarber supplies$0.30per haircutUtilities$175per month plus $0.20per haircutMagazines$25per month

Vin currently charges $10per haircut.

(a)

Your answer is correct.

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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Attempts: 2 of 5 used

(b)

Your answer is correct.

Compute the break-even point in units and dollars.

Break-even point

haircutsBreak even sales

$

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Attempts: 2 of 5 used

(d)

Your answer is incorrect.Try again.

Determine net income, assuming1,600haircuts are given in a month.

Net income / (Loss)$