Problem :
Telly Savalas owns the Bonita Barber Shop. He employs6barbers and pays each a base rate of $1,300per month. One of the barbers serves as the manager and receives an extra $520per month. In addition to the base rate, each barber also receives a commission of $5.90per haircut.
Other costs are as follows.
| Advertising |
|
$260 |
per month |
| Rent |
|
$960 |
per month |
| Barber supplies |
|
$0.40 |
per haircut |
| Utilities |
|
$170 |
per month plus $0.20per haircut |
| Magazines |
|
$20 |
per month |
Telly currently charges $11.70per haircut.
Determine the variable cost per haircut and the total monthly fixed costs.(Round variable costs to 2 decimal places, e.g. 2.25.)
Total variable cost per haircut $
Total fixed $
Compute the break-even point in units and dollars.(Round answers to 0 decimal places, e.g. 1,225.)
Break-even point haircuts
Break-even point $
Determine net income, assuming2,370haircuts are given in a month.
Net income $