Question
Trying to figure out the following problem break-even in DOLLARS per HOUR Here is the information: Operation Hair Salon 10 hours 7 days a week
Trying to figure out the following problem break-even in DOLLARS per HOUR
Here is the information:
Operation
Hair Salon
10 hours 7 days a week = (10* 7*52)= 3640 hours open in a year
Fixed Cost
$70,000 Yearly Bldg. Lease
$45,000 Yearly Utilities Cost
$14,000 Marketing Expenses
$55,000 Owner's Yearly Salary
$184,000 Total Fixed Cost
Variable Costs
$0.75 Product used per Customer
12.50 50% Commission to Stylist ($25 * .50)
$13.25 Total Variable Cost
Revenue
$25 Average sale per customer
Here's the information I have already figured out:
$11.75 Contribution Margin ($25-$13.25)
.47 Contribution Ratio
$15660 Break-even in UNITS per YEAR (184,000/(25.00-13.25)
$1305 Break-even in UNITS per MONTH (15660/12)
5 Break-even in UNITS per HOUR (15660/3650)
$391,489 Break-even in DOLLARS per year (184,000/.47)
According to my instructor: Break even Units = annual units/12
$2625 Break-even in DOLLAR per MONTH (1305*25)
According to my instructor: Break even Units = monthly units * selling price per unit
Break-even in DOLLAR per HOUR ????
Not sure if I need to divide the Break even in Units or in DOLLARS /3640 hours open in a year
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