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Homework answers / question archive / A barbershop has the following expenses: Rent is $1100/month Depreciation on equipment is $400 per month Utilities are $800 per month and advertising is $300 per month The fixed salaries for the barbers are $5,500 per month
A barbershop has the following expenses: Rent is $1100/month Depreciation on equipment is $400 per month Utilities are $800 per month and advertising is $300 per month The fixed salaries for the barbers are $5,500 per month. In addition to the salary above the barbers receive $4.50 per haircut supplies cost $.50 per haircut The price for a haircut is $14.00 1 How many haircuts do they have to do per month to break even? 2 How much profit or Loss do they make if they do 1000 haircuts in a month? 3 They have space for another chair. If they hire another barber for $1,800/month and the same variable costs, What will be the break-even number of haircuts for the shop? 4 Given the original assumptions, If they raised the price to $15.00, what would be the breakeven number of haircuts per month?
Total Fixed Expense = 1100+400+800+300+5500=$8100 per MonthContribution Margin per Haricut=14-(4.50+0.50)=$9 per HaircutPart-1BEP No. of Haircut= Fixed Expense/ CM per Haircut=8100/9=900 HaircutPart-2Contribution Margin from 1000 Haircut - Fixed Expense = Net Income=(1000*9)-8100=$900$900 they will make from 1000 HaircutPart-3Revised Fixed Expense = 1100+400+800+300+5500+1800=$9900 per MonthBEP No. of Haircut= Fixed Expense/ CM per Haircut=9900/9=1100 HaircutPart-4Contribution Margin per Haricut=15-(4.50+0.50)=$10 per HaircutBEP No. of Haircut= Fixed Expense/ CM per Haircut=8100/10=810 Haircut
