Stan Loy owns the Vista Barber Shop. He employs 5 barbers and pays each a base rate
Stan Loy owns the Vista Barber Shop. He employs 5 barbers and pays each a base rate of $1,000 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 $5.50 per haircut.
Other costs are as follows.
|Advertising||$200 per month|
|Rent||$900 per month|
|Barber supplies||$0.30 per haircut|
|Utilities||$175 per month plus $0.20 per haircut|
|Magazines||$25 per month|
Stan currently charges $10.00 per haircut.
Determine the variable cost per haircut and the total monthly fixed costs. (Round per unit costs to 2 decimal places e.g.$2.75)
Compute the break-even point in units and dollars. (Round answers to 0 decimal places.)
Determine net income, assuming 1,900 haircuts are given in a month.