# Management accounting

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Andre has asked you to evaluate his business, Andre's Hair Styling. Andre has five barbers working for him (Andre is not one of them) Eash barber is paid \$9,90 per hour and workd a 40-hour week and a 50-week, regardless of the number of haircuts. Rent and other fixed expenses are \$1,750 per month. Hair shampoo used on all clinents is .40 per client. Assume has asked you to find the following information.
2. Determine the annual break-even point, in number of haircuts.
3. What will be the operating income if 20,000 haircutd are performed?
4. Suppose Andre revises the compensation method. The barbers will receive \$4 per hour plus \$6 for each haircut, What is the new contribution margin per haircut? What is the annual break-even point (in number of haircuts)

you are missing one critical piece of information -- the price of a haircut.

that said, these are usually algebra problems. Costs are 1750. + 9.90*(5*40*50) + 0.40*HC. Revenues are P*HC. Plug in your missing P, and solve for HC.

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