Solved by verified expert :Problem 19-1A
Telly Savalas owns
the Bonita Barber Shop. He employs 6 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 4.50 per haircut.
Other costs are as
follows.
Advertising
$200 per month
Rent
$1,100 per month
Barber supplies
Utilities
Magazines
$0.30 per haircut
$175 per month plus
$0.40 per haircut
$25 per month
Telly currently
charges $10 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.)
Total variable cost
per haircut $
Total fixed
$
Compute the
break-even point in units and dollars. (Round answers to 0 decimal places, e.g.
1,225.)
Break-even point
haircuts
Break-even point $
Determine net
income, assuming 1,700 haircuts are given in a month.
Net income $
