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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?...
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This document was uploaded on 03/30/2014.

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