Question

The Spa Salon is a full- service day spa specializing in massage and manicures. One out of every three massage clients also purchases a manicure. Last month Spa Salon did 90 massages and 30 manicures and reported the following net loss:
Revenues:
Massage...... $ 8,100
Manicures...... 1,500
.......... $ 9,600
Variable costs:
Massage ...... $ (3,600)
Manicures...... (600) $
...... ... (4,200)
Fixed costs ... (7,020)
Net income (loss). $ (1,620)
After reviewing the income statement for last month, the owner was quite upset about the net loss. She thought that the spa was making money.

Required:
How many massages and manicures does Spa Salon have to conduct each month to break even, assuming that the prices and the variable costs of massages and manicures remain the same as last month’s as do the fixed costs?



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  • CreatedDecember 15, 2014
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