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Sasoon Barber Shop 3000

Price: $1.99

The Sasoon Barber Shop employs four barbers. One barber, who also serves as the
manager, is paid a salary of $3,000 per month. The other barbers are paid $1,500 per
month. In addition, each barber is paid a commission of $3 per haircut. Other monthly
costs are store rent $700 plus 60 cents per haircut, depreciation on equipment $400, barber
supplies 40 cents per haircut, utilities $300, and advertising $100. The price of a haircut
is $10.

(a) Determine the variable costs per haircut and the total monthly fixed costs.
(b) Compute the break-even point in units and dollars.
(c) Prepare a CVP graph, assuming a maximum of 1,800 haircuts in a month. Use increments
of 300 haircuts on the horizontal axis and $3,000 increments on the vertical axis.
(d) Determine the net income, assuming 1,800 haircuts are given in a month.

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