Vin Diesel owns the Fredonia Barber Shop. He employs 7 barbers and pays each a b
ID: 2523751 • Letter: V
Question
Vin Diesel owns the Fredonia Barber Shop. He employs 7 barbers and pays each a base rate of $1,310 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 $5.67 per haircut. Other costs are as follows. Advertising Rent Barber supplies Utilities Magazines $210 per month $920 per month $0.46 per haircut $180 per month plus 0.38 per haircut $30 per month Vin currently charges $11.51 per haircut.Explanation / Answer
Total variable cost per haircut = 5.67+0.46+0.38 = 6.51 per haircut
Total fixed cost = 1310*7+530+210+920+180+30 = 11040
Break even point = 11040/(11.51-6.51) =2208 haircut
Break even point = 2208*11.51 = 25414
Net income = (5*2330)-11040 = 610
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