Vin Diesel owns the Fredonia Barber Shop. He employs 7 barbers and pays each a base rate of $1,370 per month. One of the barbers serves as the manager and receives an extra $530 per month. In addition to the base rate, each barber also receives a commission of $5.84 per haircut.
Other costs are as follows.

Advertising		$250	per month
Rent		$960	per month
Barber supplies		$0.44	per haircut
Utilities		$170	per month plus $0.37 per haircut
Magazines		$25	per month

Vin currently charges $11.65 per haircut.

Required:

1. Determine the variable costs per haircut and the total monthly fixed costs.

2. Compute the break-even point in units and dollars.

3. Determine net income, assuming 2,440 haircuts are given in a month.

Answer rating: 100% (QA)

1 Variable cost per hair cut Commission 584 Barber supplies ... View the full answer