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Matt Reiss owns the Fredonia Barber Shop. He employs five barbers and pays each a base rate of \$1,000 per month. One of the barbers serves as the...

Matt Reiss owns the Fredonia Barber Shop. He employs five barbers and pays each a base rate of \$1,000 per month. One of the barbers serves as the manager and receives an extra \$500 per month. In addition to the base rate, each barber also receives a commission of \$5.50 per haircut.
Other costs are as follows.
Rent \$900 per month
Barber supplies \$0.30 per haircut
Utilities \$175 per month plus \$0.20 per haircut
Magazines \$25 per month

Matt currently charges \$10 per haircut.
Hint:
Determine variable and fixed costs, compute break-even point, prepare a CVP graph, and determine net income.

Instructions
(a)   Determine the variable cost per haircut and the total monthly fixed costs.
(b)   Compute the break-even point in units and dollars.
(d)   Determine net income, assuming 1,900 haircuts are given in a month.

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