Final answer:
The largest business expense of a salon is likely to be employee wages and salaries due to the need for skilled labor. Other expenses include fixed costs like rent and variable costs such as beauty products and utilities.
Step-by-step explanation:
The largest business expense of a salon is most likely to be employee wages and salaries. Salons require skilled labor, such as stylists and beauticians, which constitutes a variable cost. This expense can increase as more employees are hired to handle more customers. However, other significant expenses include rent or lease for the salon space (a fixed cost), cost of hair and beauty products (a variable cost that depends on the quantity of products used or sold), and utilities and overhead costs (which can have both variable and fixed components).
In an example given of a barber shop called "The Clip Joint", fixed costs such as space and equipment were set at $160 per day, and the variable costs for hiring barbers were $80 per barber each day. Adding together the fixed costs and the variable costs at each level of output can give us the total costs. With two barbers, the total cost would be calculated as: $160 (fixed costs) + $160 (2 barbers x $80 each) = $320.