Evermore Beauty Parlor The Evermore Beauty Parlor employs seven beauticians, each of whom is paid a...

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Evermore Beauty Parlor The Evermore Beauty Parlor employs seven beauticians, each of whom is paid a wage of $18 per hour. In addition, fixed annual expenses for Evermore are $48,000 per year for rent, loan interest expense, and so on. All hairstyling offered by Evermore is the same and each hairstyle is priced at $32. Assume each beautician works 2,000 hours per year and that all seven beauticians work the entire year. 1. What is Evermore's break-even point in number of hairstyles 2. What is Evermore's profit if 15,000 hairstyles are given per year? 3. If Evermore were to change to paying its beauticians a wage of $10 per hour plus a commission of $12 per hairstyle, what would be the new break-even point in number of hairstyles? 4. If Evermore were to change to paying its beauticians no wages with a commission of $25 per hairstyle, what would be the new break-even point in number of hairstyles? 5. At an annual volume of hairstyles of 15,000, which of the three beautician remuneration schemes - 2,3, or 4 above - would the beauticians prefer? Which one would the owner of Evermore prefer? 6. Given an annual volume of 15,000 hairstyles per year and assuming the Evermore owner opted to pay only a commission to beauticians, as in 4 above, what would the commission rate have to be for the owner to be indifferent to the commission-only scheme or paying only a wage of $18 per hour? First, fill out the form that documents the decision variables, all the parameters and the financial results you will create in your Excel file. Then build a proper profit model in Excel that includes calculations for Revenue, Fixed Costs, Variable Costs, Profit, etc., and that is formatted similar to the sample on the next page. Create a separate column for each of the 3 payment schemes described above. For each payment scheme also calculate the following: the contribution margin breakeven quantity indifference points Evermore Beauty Parlor The Evermore Beauty Parlor employs seven beauticians, each of whom is paid a wage of $18 per hour. In addition, fixed annual expenses for Evermore are $48,000 per year for rent, loan interest expense, and so on. All hairstyling offered by Evermore is the same and each hairstyle is priced at $32. Assume each beautician works 2,000 hours per year and that all seven beauticians work the entire year. 1. What is Evermore's break-even point in number of hairstyles 2. What is Evermore's profit if 15,000 hairstyles are given per year? 3. If Evermore were to change to paying its beauticians a wage of $10 per hour plus a commission of $12 per hairstyle, what would be the new break-even point in number of hairstyles? 4. If Evermore were to change to paying its beauticians no wages with a commission of $25 per hairstyle, what would be the new break-even point in number of hairstyles? 5. At an annual volume of hairstyles of 15,000, which of the three beautician remuneration schemes - 2,3, or 4 above - would the beauticians prefer? Which one would the owner of Evermore prefer? 6. Given an annual volume of 15,000 hairstyles per year and assuming the Evermore owner opted to pay only a commission to beauticians, as in 4 above, what would the commission rate have to be for the owner to be indifferent to the commission-only scheme or paying only a wage of $18 per hour? First, fill out the form that documents the decision variables, all the parameters and the financial results you will create in your Excel file. Then build a proper profit model in Excel that includes calculations for Revenue, Fixed Costs, Variable Costs, Profit, etc., and that is formatted similar to the sample on the next page. Create a separate column for each of the 3 payment schemes described above. For each payment scheme also calculate the following: the contribution margin breakeven quantity indifference points

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Answer Evermore Beauty Parlor Profit Model Decision Variables Number of Hairstyles H Parameters Price per Hairstyle 32 Beautician Wage 18hour Scheme 1 Beautician Commission per Hairstyle 0 Scheme 1 An... View the full answer