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The Monsoon Barber Shop employs four barbers. One barber, who also serves as the manager, is paid a salary of $3,000 per month. The other barbers are paid $1,500 per month. In addition, each barber is paid a commission of $3 per haircut. Other monthly costs are store rent $700 plus 60 cents per haircut, depreciation on equipment $400, barber supplies 40 cents per haircut, utilities $300, and advertising $100. The price of a haircut is $10.
According to the information above:
Question 1) What are the variable costs (per haircut)?
Question 2) What is the total variable cost per haircut?
Question 3) What are the fixed costs (per month)?
Question 4) What is the total fixed cost per month?
Required: Charge indirect expenses at 15% on wages. Provide kshs. 10000 for depreciation on plant and prepare the contract account
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