This preview shows page 1. Sign up to view the full content.
Unformatted text preview: ••••••••••••••••••••••••
Problem: Hawthorne Hair Salon incurred the costs shown above in delivering 2,000 haircuts. Management also has determined the following: (1) there currently are five barbers each of whom can provide 20 haircuts a day, or 400 haircuts a month (the salon hires only
full-time barbers and each works a 20-day month), (2) hair supplies are variable costs, (3) other supplies will increase to $3,000 when
David W. Young • Management Accounting for Managers • Chapter 2
Page 29 Copyrighted Material. Do not reproduce without written permission.
the number of haircuts reaches 5,000, and to $4,000 when the number of haircuts reaches 10,000, (4) utilities are semi-variable costs
with a fixed component of $600 a month regardless of the number of haircuts, and (5) rent remains at $3,000 as long as the number of
haircuts does not exceed 10,000.
What will the salon’s costs be for these five items at 5,000 haircuts?...
View Full Document
This document was uploaded on 03/30/2014.
- Spring '14