Problem 19-1A Vin Diesel owns the Fredonia Barber Shop. He employs 5 barbers and
ID: 2336249 • Letter: P
Question
Problem 19-1A Vin Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base rate of $1,460 per month. One of the barbers serves as the manager and receives an extra $510 per month. In addition to the base rate, each barber also receives a commission of $5.63 per haircut. Other costs are as follows. Advertising Rent Barber supplies Utilities Magazines $230 per month $960 per month $0.36 per haircut $180 per month plus $0.26 per haircut $20 per month Vin currently charges $11.25 per haircut. Determine the variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, e.g. 12.25.) Total variable cost per haircut Total fixed s Compute the break-even point in units and dollars. (Round answers to 0 decimal places, e.g. 1,250.) Break-even point Break-even point haircutsExplanation / Answer
(1) a :- Total variable cost per haircut = 5.63 + 0.36 + 0.26 =6.25 per haircut
b :- Total fixed cost = 1460*7 + 510 + 230 + 960 + 180 + 20 = 12120
(2) a :- Break even point = 12120/(11.25-6.25) = 12120/5 = 2424 haircut
b :- Break even point = 2424*11.25 = 2727
(3). Net income/(loss) = (5*2330)-12120 = 11650-12120 = (-470)