My teacher just throw us a problem on managerial accounting, and I don't know what to do...
Tracy’s Trims is a hair salon that specialized in trims that maintain customers’ hairstyles. The only service available at Tracy’s Trims is minor variations on a “20 minute” haircut for which the customer is charged $10. The shop has five (5) newly trained “trimmers.” (Tracy does not work in the salon. And, as owner/entrepreneur, she takes no salary.) Each trimmer is paid an annual salary of $18,000. All equipment is leased on an annual basis including store fixtures at $2,500 per year, and haircutting equipment at $2,000 per year. Building space is leased at a rate of $500 per month. Tracy is concerned about the salon’s cost structure and seeks your advice.
She ask us to:
1. Compute the contribution margin per haircut.
2. Compute the annual break-even point in number of haircuts.
I know the CM per unit formula, but I have no idea how to find the Variable Cost per hair cut, please help..
2007-12-10
17:04:36
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2 answers
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asked by
Leo
1
in
Personal Finance