Problem 5-2A a-b,d (Video) Sunland Diesel owns the Fredonia Barber Shop

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Problem 5-2A a-b,d (Video)

Sunland Diesel owns the Fredonia Barber Shop. He employs 4 barbers and pays each a base rate of $1,410 per month. One of the barbers serves as the manager and receives an extra $580 per month. In addition to the base rate, each barber also receives a commission of $10.30 per haircut.

Other costs are as follows.
 

Advertising		$230	per month
Rent		$1,100	per month
Barber supplies		$0.40	per haircut
Utilities		$160	per month plus $0.10 per haircut
Magazines		$30	per month

Sunland currently charges $18 per haircut.

Determine the variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, e.g. 2.25.)
Compute the break-even point in units and dollars.
Determine net income, assuming 1,590 haircuts are given in a month.