Question

Vin diesel owns the fredonia barber shop. he employs 6 barbers and pays each a base rate of $1,310 per month. one of the barbers serves as the manager and receives an extra $520 per month. in addition to the base rate, each barber also receives a commission of $5.90 per haircut. other costs are as follows. advertising $280 per month rent $980 per month barber supplies $0.38 per haircut utilities $170 per month plus $0.27 per haircut magazines $20 per month vin currently charges $11.55 per haircut. (a) your answer is partially correct. try again. determine the variable costs per haircut and the total monthly fixed costs. (round variable costs to 2 decimal places,

e.g. 2.25.) total variable cost per haircut

Answer 1

To find the fixed cost, we need add all costs that do not change with the number of haircuts. These are the salaries of the barbers and the manager bonus, the advertisement fees, rent and the magazines. We also have the standard part of the utility payment, the 170$. Those add up to:
6*1310+520+280+980+20+170=9830$. We also have regarding the variable costs:
The utilities variable part are included since they depend on haircuts, barber supplies and the base rate of each barber per haircut. Hence those are:
(5.90+0.38+0.27 per haircut)=6.55$ per haircut