Question
Telly Savalas owns the Bonita Barber Shop. He employs 6 barbaers and pays each a base rate of $1,000 per month. One of the barbers
Telly Savalas owns the Bonita Barber Shop. He employs 6 barbaers and pays each a base rate of $1,000 per month. One of the barbers serves as the manager and receives an extra $530 per month. In addition to the base rate, each barbers also receives a commission of $5.80 per haircut.
Other costs are as follows.
Advertising $210 per month
Rent $970 per month
Barber supplies $ 0.30 per haircut
Utilities $180 per month plus $0.40 per haircut
Telly currently charges $11.70 per haircut
1. Determine the variable costs per haircut and the total monthly fixed costs.
Total variable cost per cut $_______
Totak fixed $____________
2. Compute the break-even point in dollars and units
Break-even point _____haircuts
Break0even point $_______
3. Determine net income, assuming 2,460 haircuts are given a month.
Net income $________
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