Question :
Andre has asked you to determine his business, Andre's Hair Styling. Andre has five barbers working for him. (Andre is not one of them.) Every barber is paid $9.90 per hour and works a 40-hour week and a 50-week year, despite of the number of haircuts. Rent and other fixed expenses are $1,750 per month. Hair shampoo used on all clients is .40 per client. Consider that the only service performed is the giving of haircuts (including shampoo), the unit price of which is $12. Andre has asked you to find the subsequent information.
Locate the contribution margin per haircut. Consider that the barbers' compensation is a fixed cost. Show calculations to support your answer.
Evaluate the annual break-even point, in number of haircuts.