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Question - A local barbershop cuts the hair of male customers, the barbers offer no special styling. During the month of February 1,500 haircuts were given. The cost of haircuts includes the following:
Direct labor $10,500
Direct materials 1,500
Overhead 3,000
Total $15,000
Required -
1. Explain why process costing is appropriate for this haircutting operation.
2. Calculate the cost per haircut.
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