Question 16

Crane Diesel owns the Fredonia Barber Shop. He employs 7 barbers and pays each a base rate of $1,480 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 $5.35 per haircut. Other costs are as follows.

Advertising		$210	per month
Rent		$1,080	per month
Barber supplies		$0.40	per haircut
Utilities		$200	per month plus $0.25 per haircut
Magazines		$35	per month

Crane currently charges $15 per haircut.

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		$enter a dollar amount rounded to 2 decimal places
Total fixed		$enter a dollar amount

Compute the break-even point in units and dollars.

Break-even point		enter the Break-even point in units	haircuts
Break even sales		$enter the Break-even sales in dollars

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

Net income / (Loss)

$enter net income in dollars

Click if you would like to Show Work for this question:

Open Show Work