Solution-Compute the monthly break-even point

Compute the monthly break-even point

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Reference no: EM131610618

Janice owns the Cute Cut Salon. She employs 5 stylists and pays each a base salary of $1,700 per month. One of the stylists serves as the manager, receiving an extra $500 per month. In addition to the base salary, each stylist receives a commission of $5 per haircut. Each stylist can do as many as 20 haircuts a day, but the average is 17 haircuts each per day. The Cute Cut Salon is open an average of 24 days per month.

Other financial information is as follows:

Advertising	$ 700 per month
Rent	$1,160 per month
Supplies	$ 2.50 per haircut
Utilities	$ 310 per month plus $0.75 per haircut
Magazines	$ 50 per month
Cleaning supplies	$ 0.25 per haircut
Price per haircut	$25

Required:

1. Compute the monthly break-even point for the following:

a. Number of haircuts.
b. Total sales dollars.
c. As a percentage of maximum capacity.

Reference no: EM131610618

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Compute the monthly break-even point

Reference no: EM131610618

Reference no: EM131610618

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