Identification of Fixed vs. Variable Costs and CVP Analysis

You have been asked to help Tammys Nail Salon with their expansion plans. The salon offers manicures and pedicures to a suburban clientele in Western New York. Information on their business at their current location is as follows:

Monthly lease = $3,500 (Gross) includes utilities, maintenance, and taxes

Managers salary = $30,000/year

Monthly advertising and web expense = $1,500

Average customer bill = $45 (some manicures only, some mani/pedi with designs, etc)

On average, technicians spend 1.5 hours with a customer

Technicians cost $15/hour including applicable payroll taxes

Materials used (polish, swabs, cleanser, etc.) average about $1 per client

The salon is open 6 days per week, 4 weeks per month.

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1. What are the fixed costs per month associated with the salon?

2. What are the total variable costs?

3. How many customers per month does the salon have to service now in order to break even? Per day?