PROBLEM 5

# PROBLEM 5 - (1 \$11Q = \$5Q \$7,500 \$0 \$6Q = \$7,500 Q = 1,250...

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PROBLEM 5-1A (a) Variable costs (per haircut) Fixed costs (per month) Barber’s commission \$4.00 Rent .60 Barber supplies .40 Total variable \$5.00 Barbers’ salaries* \$5,700 Rent 800 Depreciation 500 Utilities 300 Advertising 200 Total fixed \$7,500 *(3 X \$1,300) + \$1,800 (b) Sales = Variable costs + Fixed costs + Net income

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Unformatted text preview: (1) \$11Q = \$5Q + \$7,500 + \$0 \$6Q = \$7,500 Q = 1,250 haircuts (2) 1,250 haircuts X \$11 = \$13,750 (d) Net income = Sales – Variable costs – Fixed costs Net income = \$16,500 – (\$5.00 X 1,500) – \$7,500 = \$1,500 (c) Break-even point...
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PROBLEM 5 - (1 \$11Q = \$5Q \$7,500 \$0 \$6Q = \$7,500 Q = 1,250...

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