Problem what would the accountants profitability

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Unformatted text preview: step function costs—they will remain fixed until the number of haircuts increases by a fairly sizable number. Hair supplies, by contrast, are variable costs—they will change in direct proportion to a change in the number of haircuts. Other supplies probably vary with the number of personnel, they could be thought of as step-function costs. Utilities are probably semi-variable; the center probably pays a fixed amount each month with a variable component based on usage. Usage, in most settings, is proportional to the number of hours the salon is open, which is related to the number of haircuts. Rent, on the other hand, probably is fixed (although with some ceiling on the number of haircuts—once they reach a certain level, the salon will need to rent a larger facility. ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••...
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