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Compute the break-even point and total monthly fixed costs

Assignment Help Managerial Accounting
Reference no: EM13503548

Problem :

Telly Savalas owns the Bonita Barber Shop. He employs6barbers and pays each a base rate of $1,300per month. One of the barbers serves as the manager and receives an extra $520per month. In addition to the base rate, each barber also receives a commission of $5.90per haircut.

Other costs are as follows.

 

Advertising
$260 per month
Rent
$960 per month
Barber supplies
$0.40 per haircut
Utilities
$170 per month plus $0.20per haircut
Magazines
$20 per month

Telly currently charges $11.70per 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, assuming2,370haircuts are given in a month.

Net income $

Reference no: EM13503548

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