Problem 19-1a – telly savalas owns the bonita barber shop
Problem 19-1A
Telly Savalas owns the Bonita Barber Shop. He employs 6 barbers and pays each a base rate of $1,200 per month. One of the barbers serves as the manager and receives an extra $540 per month. In addition to the base rate, each barber also receives a commission of $5.70 per haircut.
Other costs are as follows.
Advertising
$250 per month
Rent
$990 per month
Barber supplies
Utilities
Magazines
$0.50 per haircut
$175 per month plus $0.40 per haircut
$30 per month
Telly currently charges $11.80 per haircut.
Determine the variable cost 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
$
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 $
Determine net income, assuming 2,400 haircuts are given in a month.
Net income $
