Problem 18-1A (Part Level Submission)
Vin Diesel owns the Fredonia Barber Shop. He employs 7 barbers and pays each a base rate of
$1,380 per month. One of the barbers serves as the manager and receives an extra $530 pe
...
Problem 18-1A (Part Level Submission)
Vin Diesel owns the Fredonia Barber Shop. He employs 7 barbers and pays each a base rate of
$1,380 per month. One of the barbers serves as the manager and receives an extra $530 per month. In
addition to the base rate, each barber also receives a commission of $5.92 per haircut.
Other costs are as follows.
Advertising $270 per month
Rent $940 per month
Barber supplies $0.30 per haircut
Utilities $180 per month plus $0.25 per haircut
Magazines $25 per month
Vin currently charges $11.47 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
$
Total fixed
$
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(b)
Your answer is correct.
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
$
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6.47
11605
2321
26621.87
Problem 18-1A (Part Level Submission) Page 1 of 2
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(d)
Your answer is correct.
Determine net income, assuming 2,380 haircuts are given in a month. (Round answer to 0 decimal
places, e.g. 1,225.)
Net income / (Loss)
$
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295
Problem 18-1A (Part Level Submission) Page 2 of 2
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