Compute the break-even point in units and dollars

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Reference no: EM13145173

Matt Reiss owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base rate of $1,000 per month. One of the barbers serves as the manager and receives an extra $500 per month. In addition to the base rate, each barber also receives a commission of $5.50 per haircut.

Other costs are as follows.

Advertising $200 per month

Rent $900 per month

Barber supplies $0.30 per haircut

Utilities $175 per month plus $0.20 per haircut

Magazines $25 per month

Matt currently charges $10.00 per haircut.

(a) Determine the variable cost per haircut and the total monthly fixed costs.

(b) Compute the break-even point in units and dollars.

(d) Determine net income, assuming 1,900 haircuts are given in a month.

Reference no: EM13145173

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