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This saloon is performing haircuts exclusively and each client paid a flat price of $ 12.00.
He wanted for us to evaluate a new compensation method for his employees. Under the new system the barbers will receive a flat salary of $4 per hour, and a commission of $ 6.00 for each haircut. In this case Andre wants to know how much is going to be the new contribution margin per haircut, the annual break-even point in number of haircuts.
On our evaluation, Andre requested to find the following information.
1. Find the contribution margin per haircut.
Contribution Margins Definition
"Contribution margin (or margins) refers to the amount of revenue per product that is available to "contribute" towards the fixed costs and the profit of the company...
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