Cullumber Diesel owns the Fredonia Barber Shop. He employs 7 barbers and pays each a base...

  

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Cullumber Diesel owns the Fredonia Barber Shop. He employs 7 barbers and pays each a base rate of $1,200 per month. One of the barbers serves as the manager and receives an extra $560 per month. In addition to the base rate, each barber also receives a commission of $6.10 per haircut. Other costs are as follows. Advertising Rent Barber supplies Utilities Magazines $270 per month $970 per month $0.40 per haircut $175 $20 per month per month plus $0.10 per haircut Cullumber currently charges $12 per haircut. Instructions (a) Determine the variable costs per haircut and the total monthly fixed costs. (a) VC $5 (b) Compute the break-even point in units and dollars. (c) Prepare a CVP graph, assuming a maximum of 1,800 haircuts in a month. Use increments of 300 haircuts on the horizontal axis and $3,000 on the vertical axis. (d) Determine net income, assuming 1,600 haircuts are given in a month. Cullumber Diesel owns the Fredonia Barber Shop. He employs 7 barbers and pays each a base rate of $1,200 per month. One of the barbers serves as the manager and receives an extra $560 per month. In addition to the base rate, each barber also receives a commission of $6.10 per haircut. Other costs are as follows. Advertising Rent Barber supplies Utilities Magazines $270 per month $970 per month $0.40 per haircut $175 $20 per month per month plus $0.10 per haircut Cullumber currently charges $12 per haircut. Instructions (a) Determine the variable costs per haircut and the total monthly fixed costs. (a) VC $5 (b) Compute the break-even point in units and dollars. (c) Prepare a CVP graph, assuming a maximum of 1,800 haircuts in a month. Use increments of 300 haircuts on the horizontal axis and $3,000 on the vertical axis. (d) Determine net income, assuming 1,600 haircuts are given in a month.

Answer rating: 100% (QA)

Answer 1 Total Variable Cost Per haircut Particulars Commission per haircut Barb... View the full answer