Question

Sunland Diesel owns the Fredonia Barber Shop. He employs 4 barbers and pays each a base rate of $1,410 per month. One of the barbers serves as the manager and receives an extra $580 per month. In addition to the base rate, each barber also receives a commission of $10.30 per haircut.

Other costs are as follows.

Advertising: $230 per month

Rent: $1,100 per month

Barber supplies: $0.40 per haircut

Utilities: $160 per month plus $0.10 per haircut

Magazines: $30 per month

Sunland currently charges $18 per haircut.

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: $10.80

Total fixed: $7,740

Compute the break-even point in units and dollars.

Break-even point: 1,075 haircuts

Break even sales: $19,350

Determine net income, assuming 1,590 haircuts are given in a month.

Net income / (Loss): $3,708

Can someone tell me if I did this correctly? Thank you!

Answer 1

{ Yes sir, your answers are absolutely correct }