Compute the break-even point in units and dollars

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Reference no: EM132013897

Question - Telly Savalas owns the Bonita 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 $550 per month. In addition to the base rate, each barber also receives a commission of $5.50 per haircut.

Other costs are as follows.

Advertising

$200 per month

Rent

$980 per month

Barber supplies

$0.40 per haircut

Utilities

$180 per month plus $0.30 per haircut

Magazines

$25 per month

Telly currently charges $11.40 per haircut.

Determine the variable cost per haircut and the total monthly fixed costs.

Compute the break-even point in units and dollars.

Determine net income, assuming 2,420 haircuts are given in a month.

Reference no: EM132013897

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