Southfield Stylers, with three chairs, offers a no-frills hair style service at a single price. The...

 

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Southfield Stylers, with three chairs, offers a no-frills hair style service at a single price. The price of $27 and the variable cost of $7 per customer remain constant regardless of volume. The owner can handle additional volume by hiring on-call stylists to staff the two additional chairs if demand is sufficient. Southfield pays the on-call stylists for one full week regardless of actual demand that week. Southfield has three choices every week, as follows: 1 Chair 2 Chairs 3 Chairs Required: Weekly Volume Range (Number of Customers) 0-108 109-216 217-316 Total Fixed Costs $ 2,620 3,760 5,560 a. Calculate the break-even point(s). b-1. Calculate the profit (or loss) for each alternative, assuming sufficient demand to keep all chairs busy. b-2. Should Southfield operate with one, two, or three chairs? Southfield Stylers, with three chairs, offers a no-frills hair style service at a single price. The price of $27 and the variable cost of $7 per customer remain constant regardless of volume. The owner can handle additional volume by hiring on-call stylists to staff the two additional chairs if demand is sufficient. Southfield pays the on-call stylists for one full week regardless of actual demand that week. Southfield has three choices every week, as follows: 1 Chair 2 Chairs 3 Chairs Required: Weekly Volume Range (Number of Customers) 0-108 109-216 217-316 Total Fixed Costs $ 2,620 3,760 5,560 a. Calculate the break-even point(s). b-1. Calculate the profit (or loss) for each alternative, assuming sufficient demand to keep all chairs busy. b-2. Should Southfield operate with one, two, or three chairs?

Answer rating: 100% (QA)

a Calculate the breakeven points To calculate the breakeven point we need to find the number of cust... View the full answer