Managerial Accounting: P22-1A (a,b,d) Matt Reiss owns the Fredonia Barber Shop
Managerial Accounting P22-1A (a, b, d) Matt Reiss owns the Fredonia Barber Shop. He employs five barbers and pays each a base rate of $1,000 per month. One of the barbers serves as the manager and receives an extra $500 per month. In addition to the base rate, each barber also receives a commission of $5.50 per haircut. Other costs are as follows. Advertising $200 per month Rent $900 per month Barber supplies $0.30 per haircut Utilities $175 per month plus $0.20 per haircut Magazines $25 per month Matt currently charges $10 per haircut.
Instructions: a. Determine the variable cost per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, e.g. 10.50. Round fixed costs to 0 decimal places, e.g. 125.) b. Compute the break-even point in units and dollars. d. Determine net income, assuming 1,900 haircuts are given in a month.