Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Crazy Hair Salon provides special - occasion haircuts and generates average revenue of $ 6 6 per customer. The salon s fixed costs are

The Crazy Hair Salon provides special-occasion haircuts and generates average revenue of $66 per customer. The salons fixed costs are $42,000 per year, which include rent, utilities and magazine subscriptions. Its variable costs are $16.50 per customer. Target operating income for the year is $102,000.
Do not enter dollar signs or commas in the input boxes.
a) Calculate the revenues needed to obtain the target operating income.
Round the Contribution Margin ratio to 2 decimal places. Round all other answers to the nearest whole number.
CM ratio: Answer
%
Total CM: $Answer
Revenue: $Answer
b) How many haircuts have to be provided to earn an operating income of $66,000? To break-even?
Round up to the nearest whole unit.
BEP: Answer
Haircuts to yield $66,000: Answer
c) Calculate the operating income if 2,900 haircuts are provided.
Round to the nearest whole number.
Operating Income: $Answer

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Risk Management

Authors: Faisal F. Al-Thani, Tony Merna

2nd Edition

0470518332, 978-0470518335

More Books

Students also viewed these Accounting questions

Question

Describe ERP and how it can create efficiency within a business

Answered: 1 week ago