Question

Vin Diesel owns the Blue Spruce Barber Shop. He employs 5 barbers and pays each a base rate of $1,490 per month. One of the barbers serves as the manager and receives an extra $550 per month. In addition to the base rate, each barber also receives a commission of $4.50 per haircut. Other costs are as follows. Advertising $270 per month Rent $990 per month Barber supplies $0.30 per haircut Utilities $185 per month plus $0.20 per haircut Magazines $20 per month Vin currently charges $10.00 per haircut.

(a) Determine the variable costs per haircut and the total monthly fixed costs. (Round variable costs to 2 decimal places, e.g. 2.25.) Total variable cost per haircut $ Total fixed $ Click if you would like to Show Work for this question:

Answer 1

Variable cost = 4.50+0.30+0.20 = 5
Fixed cost = (5*1490)+550+270+990+185+20 = 9465