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Question - Telly Savalas owns the Bonita Barber Shop. He employs 5 barbers and pays each a base rate of $ 1,300 per month. One of the barbers serves as the manager and receives an extra $ 510 per month. In addition to the base rate, each barber also receives a commission of $ 5.80 per haircut.
Other costs are as follows.
Advertising$ 260 per monthRent$ 970 per monthBarber supplies$ 0.50 per haircutUtilities$ 170 per month plus $ 0.30 per haircutMagazines$ 25 per month
Telly currently charges $ 11.80 per haircut.
(a) Determine the variable cost per haircut and the total monthly fixed costs.
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