Question

Salon de Beauty, a local hair salon, incurred the following costs last month. (Hint: Treat Salon utilities as Variable cost) Salon rent Salon utilities (electric and water) Hairstylists' salaries Hairstylists' commissions (a percentage of sales) Depreciation on fixtures and equipment Shampoo and conditioner (only a small amount is used on each customer) Insurance Advertising Store manager's salary Hair dye and perm kits (each dye job or perm uses one kit) $ 2,200 $ 810 $ 5,700 $ 3,100 $ 730 $ 280 $ 1,100 $ 2,100 $ 2,400 370 Calculate each of the following, where the cost object is customers served: a. Total variable costs. Total Variable Cost b. Total fixed costs. Total Fixed Cost c. Total direct costs. Total Direct Cost

Answer 1

a) Total variable cost
salon utilities(electric & water)				810
hairstylist commission(a % of sales)				3100
shampoo & conditioner				280
hair dye & perm kits				370
total variable cost				4560
b) total fixed costs
salon rent				2200
hairstylist salaries				5700
depreciation on fixture & equipment				730
insurance				1100
advertising				2100
store managers salary				2400
total fixed cost				14230
c) Total direct costs
hairstylist commission(a % of sales)				3100
hair dye & perm kits				370
Total direct costs				3470
d) total indirect cost
salon rent				2200
salon utilities(electric & water)				810
hairstylist salaries				5700
depreciation on fixture & equipment				730
shampoo & conditioner				280
insurance				1100
advertising				2100
store managers salary				2400
total indirect cost				15320