Reference no: EM131738635
Problem - Vin Diesel owns the Fredonia Barber Shop. He employs 4 barbers and pays each a base rate of $1,250 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 monthRent$1,100 per month Barber supplies$0.30 per haircutUtilities$175 per month plus $0.20 per haircutMagazines$25 per month Vin currently charges $10 per haircut.
(a) Your answer is correct. Determine the variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, e.g. 2.25.)
Total variable cost per haircut$ 5.00
Total fixed$ 7000
(b) Your answer is incorrect. Try again. Compute the break-even point in units and dollars. (Round answers to 0 decimal places, e.g. 1,225.)
Break-even point 1400
Haircuts Break-even point$ 14,000
(c) Your answer is incorrect. Try again. Determine net income, assuming 1,600 haircuts are given in a month. (Round answer to 0 decimal places, e.g. 1,225.)