Andre has asked you to evaluate his business, Andreā€™s Hair Styling. - 25336

Solution Posted by
SuperPower

SuperPower

Rating : (21)A
Solution Detail
Price: $5.99
  • From: Business,
  • Posted on: Wed 18 Sep, 2013
  • Request id: None
  • Purchased: 0 time(s)
  • Average Rating: No rating
Request Description

Consider the following scenario:
Andre has asked you to evaluate his business, Andre’s Hair Styling. Andre has five barbers working for him. (Andre is not one of them.) Each barber is paid $9.90 per hour and works a 40-hour week and a 50-week year, regardless of the number of haircuts. Rent and other fixed expenses are $1,750 per month. Hair shampoo used on all clients is .40 per client. Assume that the only service performed is the giving of haircuts (including shampoo), the unit price of which is $12. Andre has asked you to find the following information.

Find the contribution margin per haircut. Assume that the barbers' compensation is a fixed cost. Show calculations to support your answer.
Determine the annual break-even point, in number of haircuts. Support your answer with an appropriate explanation. Show calculations to support your answer.
What will be the operating income if 20,000 haircuts are performed? Show calculations to support your answer.
Suppose Andre revises the compensation method. The barbers will receive $4 per hour plus $6 for each haircut. What is the new contribution margin per haircut? What is the annual break-even point (in number of haircuts)? Show calculations to support your answer.

Solution Description

Previously, thank you for purchasing my tutorial. I try to

Attachments
Andre's Hair Styling Solutions (All Questions Answered + Formulas).xls
Andre's Hair St...
Andre's Hair Styling Solutions (Doc Format).doc
Andre's Hair St...