Question
Style Inc. is a hair care studio that specializes in haircuts and entertainment. During a haircut, the customer receives a beverage of their choosing and
Style Inc. is a hair care studio that specializes in haircuts and entertainment. During a haircut, the customer receives a beverage of their choosing and watches television or chooses to listen to music. Style Inc. is working on understanding its costs and has created the following list of costs for you. You can ignore tips in this analysis because Style Inc. does not allow its customers to tip the hair stylist; ignore any other costs that are not mentioned here.
- Each haircut costs the customer $65
- Style Inc. pays its employees $20 per haircut
- The subscription to the television service customers watch during their haircut is $250/month
- Beverages cost $2/each, and every customer gets a beverage during their haircut
- The rent on the studio is $1,000/month
- The manager of the studio earns a fixed fee of $2,000/month
Question: What is breakeven revenue for Style Inc. for one month? Hint, you will need to use the formula FC/CM%. Round your CM% to 5 decimal places and round your final answer to the nearest dollar.
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