HFT 4474 - Problem 19-1A Telly Savalas

Problem 19-1A
Telly Savalas owns the Bonita Barber Shop. He employs 6 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 4.50 per haircut.
Other costs are as follows.
Advertising

$200 per month

Rent

$1,100 per month

Barber supplies
Utilities
Magazines

$0.30 per haircut
$175 per month plus $0.40 per haircut
$25 per month

Telly currently charges $10 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 1,700 haircuts are given in a month.
Net income $