Andre has asked you to evaluate his business , Andre's Hair Styling. Andre has 5 barbers workin

Andre is not one of them. Each barber is paid $9.90 and hour and works a 40 hour week and a 50 week year, regardless of the number of haircuts. Rent and other fixed expenses are $1,750 per month. Hair shampoo used on all clients is.40 per client. Assume that the only service performed is the giving of hair cuts, the unit price of which is $12. Andre has asked you to find the fallowing information. 1. Find the contribution margin per haircut. Assume that the barbers compensation is a fixed cost. Show calulations to support your answer.2. Determine the annual break even point, in the number of haircuts. Support your answer with an appropriate explination. Show calulations to support your answer.3. What will be the operating income if 20,000 haircuts are performed? Show calulations to support your answer.4. Suppose Andre revises the compensation method. The barbers will recieve $4 per hour plus $6 for each haircut. What is the new contribution margain per haircut? What is the break even?

Andre has asked you to evaluate his business , Andre's Hair Styling. Andre has 5 barbers working for him.?

1. Contribution margin = revenue - variable costs

= $12 - $0.40 = $11.60.

2. Annual Break Even Point.

Fixed Costs = Workers + Rent

5 workers * $9.90 * 40 * 50 + $1750 * 12 = $99,000 + $21,000 = $120,000

120000 / 11.6 = 10,345 Haircuts.

3. Operating Income = Gross Profit - Operating Expenses

20,000 * $11.4 - $120,000 = $108,000

4. Contribution margin = revenue - variable costs

= $12 - $6 - $0.40 = $5.60

Break Even:

Fixed Costs = Workers + Rent

5 workers * $4 * 40 * 50 + $1750 * 12 = $40,000 + $21,000 = $61,000

61000 / 5.6 = 10,893 Haircuts

Andre has asked you to evaluate his business , Andre's Hair Styling. Andre has 5 barbers working for him.?

firstly,you should think for the necessary.if you think 5 barbers is make non economic to you,you should least them to 3 or 2.i don't know how big your shop is but it is depends on you andre.i'm count on you.

Andre has asked you to evaluate his business , Andre's Hair Styling. Andre has 5 barbers working for him.?

look at that examples in you marketing or cost accounting book. You should have mastered these terms and formula by this point in the term, work harder and study more, you are sure to have at least one similar problem on the final. Contribution Margin = sales - variable costs.

Contribution Margin Ratio = (sales - variable costs)/sales

you did not give the info necessary in that part.