Here is the adjusted assignment that’s needed:
Problem 18-1A |
 |
Telly Savalas owns the Bonita Barber Shop. He employs7barbers and pays each a base rate of $1,100per month. One of the barbers serves as the manager and receives an extra $500per month. In addition to the base rate, each barber also receives a commission of $5.70per haircut.
Other costs are as follows.
| Advertising |
|
$220 |
per month |
| Rent |
|
$940 |
per month |
| Barber supplies |
|
$0.40 |
per haircut |
| Utilities |
|
$175 |
per month plus $0.20per haircut |
| Magazines |
|
$30 |
per month |
Telly currently charges $11.50per haircut.
|
|
|
|
|
Determine net income, assuming2,340haircuts are given in a month.
| Net income |
|
$ |
| LINK TO TEXTLINK TO TEXT |
LINK TO VIDEO |
|
|
|
| Exercise 18-9 |
|
The Green Acres Inn is trying to determine its break-even point. The inn has 50 rooms that it rents at $75a night. Operating costs are as follows.
| Salaries |
|
$8,673 |
per month |
| Utilities |
|
$1,859 |
per month |
| Depreciation |
|
$1,239 |
per month |
| Maintenance |
|
$619 |
per month |
| Maid service |
|
$9 |
per room |
| Other costs |
|
$36 |
per room |
Determine the inn’s break-even point in (1) number of rented rooms per month and (2) dollars.
| (1) |
|
Break-even point |
|
|
rooms |
| (2) |
|
Break-even point |
|
$ |
|
| Exercise 18-11 |
|
Kare Kars provides shuttle service between four hotels near a medical center and an international airport. Kare Kars uses two 10-passenger vans to offer 12 round trips per day. A recent month’s activity in the form of a cost-volume-profit income statement is shown below.
| Fare revenues (1,400fares) |
|
|
|
$35,000 |
| Variable costs |
|
|
|
|
| Fuel |
|
$4,200 |
|
|
| Tolls and parking |
|
2,100 |
|
|
| Maintenance |
|
700 |
|
7,000 |
| Contribution margin |
|
|
|
28,000 |
| Fixed costs |
|
|
|
|
| Salaries |
|
14,110 |
|
|
| Depreciation |
|
1,328 |
|
|
| Insurance |
|
1,162 |
|
16,600 |
| Net income |
|
|
|
$11,400 |
(a)Calculate the break-even point in (1) dollars and (2) number of fares.
| (1) |
|
Break-even point |
|
$ |
|
| (2) |
|
Break-even point |
|
|
fares |
(b)Without calculations, determine the contribution margin at the break-even point.
| Contribution margin at the break-even point |
|
$ |
