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Determine the variable cost per haircut

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Reference no: EM131765520

Problem - Matt Reiss owns the Fredonia Barber Shop. He employs 7 barbers and pays each a base rate of $1,100 per month. One of the barbers serves as the manager and receives an extra $520 per month. In addition to the base rate, each barber also receives a commission of $5.70 per haircut.

Other costs are as follows.

Advertising $290 per month

Rent $970 per month

Barber supplies $0.30 per haircut

Utilities $180 per month plus $0.30 per haircut

Magazines $30 per month

Matt currently charges $11.50 per haircut.

Determine the variable cost per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, e.g. 2.25.)

Compute the break-even point in units and dollars. (Round answers to 0 decimal places, ie. 1,275.)

Determine net income, assuming 2,330 haircuts are given in a month.

Reference no: EM131765520

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