Pablo wants to start a barbershop. He would like to have an extra $1,040 per month to help with his house payments. He has found a location that will rent him space for $675 per month, plus an additional $120 for electricity and water. He will need a capital investment of $300 for the necessary clippers and equipment that he will depreciate over the first year in equal amounts. In addition, he will need small items such as towels, combs, and so on. This cost will be about $240 per year. He adds $70 per month for miscellaneous expense items that may pop up throughout the month.

Requirement

a.  fill in the budget forecast that will show his monthly and yearly revenues with the numbers outlined in the problem statement.

Budget Forecast
	Month	Year
Revenue	1950	23400
Expenses
Rent
Electric/Water
Depreciation
Other small items
Misc Items
Total Expenses
Net Income	$1,040	$12,480

Requirement b. How much does he need in gross revenue per month to obtain the $1,040 profit per month?

Gross revenue per month needed to obtain $1,040 gross profit per month =

Part 3

Requirement c. If he charges $13 per haircut, how many haircuts will he need to perform to make his $1,040 profit per month? (Round your answer up to the nearest whole number.)

Monthly haircuts needed =

Part 4

Requirement d. Using the principles in a sensitivity budget, what would Pablo have to charge to perform only 130 haircuts and still reach his $1,040 profit per month? (Round to the nearest whole dollar.)

Amount Pablo would have to charge per haircut to reach this goal =

Part 5

Requirement e. How many haircuts must be done to make a $1,265 profit per month, assuming he charges $15 per haircut?(Round your answer up to the nearest whole number.)

Monthly haircuts needed with this new price per cut and monthly profit goal =

Answer rating: 100% (QA)

Solution a Prepare the budget forecast Month Particulars Amount Revenue 1950 Expenses Rent expense 6... View the full answer