Question

Question8 0.5 pts Jenny's Cutting Station is a new concept in haircuts-low cost and very quick. Located in a local mall, Jenny's offers 15 minute haircuts for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickly, she schedules her 5 employees based on expected client traffic. Each of the employees is paid $1,200 per month plus any client tips they receive. Jenny pays herself $5,000 per month. Jenny pays rent and overhead costs of $2,000 per month. Because of the quick nature of the service, Jenny doesn't have time to clean combs in between clients, so she uses a new comb for each customer, at a cost of $.85 each. She also provides shampoo and conditioner for each client at a cost of $.95 per client. The price for a haircut is $12 What is Jenny's contribution margin per haircut? O $10.50 $11.05 O $10.20 o $11.45

Answer 1

Solution:

Contribution margin per hairbcut = price per haircut - cost of comb per client - cost of shampoo and conditioner per client

Contribution margin per hair cut = 12-0.85-0.95

Contribution margin per hair cut = 10.20