Mary Contrary owns the Mary's Massage in Minutes at the local shopping centre. She employs 9 massage
Question:
Mary Contrary owns the Mary's Massage in Minutes at the local shopping centre. She employs 9 massage therapists and pays each a base rate of $1,100 per month. One of the massage therapists serves as the manager and receives an extra $900 per month. In addition to the base rate, each massage therapist also receives a commission of $30 per client. Other costs are as follows:
Advertising: $450 per month Rent: $1,000 per month + $2.50 per massage Massage Supplies: $28 per massage Power: $410 per month Dry Cleaning: $465 per month Depreciation: $475 per month
Mary currently charges $65 per massage.
Required: a.) Determine the variable cost per massage and total monthly fixed costs. b.) Calculate the break-even point in units and dollars. c.) Determine profit if 3,750 massages are given in a month. d.) Calculate the required number of massages if a $21,000 profit per month is to be achieved.