Determine the variable cost – Managerial Economics
The peace barber shop employs 4-barbers. One barber, who also serves as the manager, is paid a salary of $1,800 every month. The other barbers are paid 1,300 every month. In addition, each barber is paid a commission of $4 per haircut. Other monthly costs are: store rent $800 plus 60 cents per haircut, depreciation on equipment $500, barber supplies 40 cents per haircut, utlilities $300, and advertising $ 200. the price of a haircut is $11.
Instructions
(1) how can I determine the variable cost per haircut and the total monthly fixed cost
(2) how do I compute the break even point in units and dollars
(3) How do I determine the net income, assuming 1500 are given in a month?
