Compute the break-even point in units and dollars

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Reference no: EM132841658

Question - Vin Diesel owns the Fredonia Barber Shop. He employs 4 barbers and pays each a base rate of $1,250 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 $4.50 per haircut.

Advertising $200 per month

Rent $1,100 per month

Barber supplies $0.30 per haircut

Utilities $175 per month plus $0.20 per haircut

Magazines $25 per month

Vin currently charges $10 per haircut.

Required -

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

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

Reference no: EM132841658

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