Stan loy owns the vista barber shop he employs 5 barbers, Ask an Expert

Accounting

Stan Loy owns the Vista Barber Shop. He employs 5 barbers and pays each a base rate of $1000 per month. One of the barbers serves as a 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: Advertising $200 per month, Rent 900 per month, Barber supplies .30 per haircut, Utilities 175 per month plus .20 per haircut, Magazines 25 per month.

Stan currently charges $10 per haircut.

a) Determine the variable cost per haircut and the total monthly fixes costs

b) Compute the break even point in units and dollars

c) Prepara a CVP graph assuming a maximum of $1,800 haircuts in a month. Use increments of 300 haircuts on the horizontal axis and $3,000 on the vertical axis.

d) Determine net income, assuming 1,900 haircuts are given in a month.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91722792

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