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Essay text:
The calculations are as followed.
There are 5 barbers and they are paid $9.90 per hour. They work 40 hours a week and 50 weeks per year. This is considered a guaranteed salary (Onyiri, 2008).
If you multiply $9.90 per hour times 40 hours a week by the 5 barbers they will make $396 a week per barber.
To find the contribution margin per haircut you will need to do the following calculations.
Selling price per unit= $12 and variable cost per unit =$.40 = $12 – 0.40 =$11.60
Contribution margin (CM) = selling price- variable cost= $11.60
Now Andre wants you to look at the information given and determine what his annual break-even point, in the number of haircuts needed, will be...
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