Question

Process Costing, Service Organization A local barbershop cuts the hair of 1,100 customers per month. The...

Process Costing, Service Organization

A local barbershop cuts the hair of 1,100 customers per month. The clients are men, and the barbers offer no special styling. During the month of May, 1,100 customers were serviced. The cost of haircuts includes the following:

Direct labor $12,900
Direct materials 1,300
Overhead 2,300
  Total $16,500

Required:

Calculate the cost per haircut.
$per haircut

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Answer #1

Calculation of cost per hair cut :-

Cost per hair cut = Total cost ÷ Number of customers.

Cost per hair cut = $16,500 ÷1,100 = $15 per hair cur.

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