Management accounting
posted by Charlotte Holmes
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 40hour week and a 50week, 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 breakeven 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 breakeven 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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