Fernando Chavez owns the FC Barber Shop, which is a one-man shop (owned by Fernando and he
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Question:
Fernando Chavez owns the FC Barber Shop, which is a one-man shop (owned by Fernando and he is the only employee). with the following information for FC Barber Shop's August operations, please calculate (A) unit contribution margin and prepare (B) a contribution margin income statement.
Break-even point transactions
cost information | cost |
advertising | $100 per month |
rent | $1,000 per month |
barber supplies | $1.00 per haircut |
utilities | $150 per month plus $0.50 per haircut |
wages | $500 per month plus $6.00 per haircut |
price of haircut | $30 per haircut |
number of haircuts provided | 150 haircuts |
(A) Unit contribution Margin
unit contribution margin | $22.50 |
(B) Contribution margin income statement
sales | $4,500 |
variable costs | $1,125 |
contribution margin | $3,375 |
fixed costs | $1,750 |
net income | $1,625 |
How did they find the fixed cost ($1,750) and net income ($1,625)?
Related Book For
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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