Question & Answer: employs 5.00 barbers and pays each a base rate of $1,640 per month. One of the barbers se…..
Vin Diesel owns the Fredonia Barber Shop. He employs 5.00 barbers and pays each a base rate of $1,640 per month. One of the barbers serves as the manager and receives an extra $520 per month. In addition to the base rate, each barber also receives a commission of $5.96 per haircut.
Other costs are as follows.
Advertising
$280
per month
Rent
$990
per month
Barber supplies
$0.47
per haircut
Utilities
$175
per month plus $0.35 per haircut
Magazines
$25
per month
Vin currently charges $11.78 per haircut.
Determine the variable costs 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
$
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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
$
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Determine net income, assuming 2,490 haircuts are given in a month. (Round answers to 0 decimal places, e.g. 1,225.)
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