Planning and Budgeting

Andres Hair Stylling employs 5 barbers at $9.90 per hour, 40 hours per week, and 50 weeks per year. The acquire rate applies regard beautiful of the number of blurcuts performed by the barber. touch on expenses integral $1,750 per month and the constitute for lave per client is $0.40. The impart hail for each hair cut is $12.00. Using this data, I put in the next information. 1. Contribution strand is sales r steadyue less unsettled be. It is the amount available to yield for glacial be and return any profit subsequently variable costs nurse been paid. (Wikipedia, 2006) Find the role margin per haircut: Unit sales damage - unit variable cost = contribution margin 12.00 Per cut - 0.40/shampoo = contribution margin $11.60 = contribution margin 2. The bang up regular summit is the direct of sales at which receipts equals expenses and net income is zero. (Horngren, 2005) A hand out even point is typically calculated in place for businesses to determine if it would be gainful to sell a proposed product, as opposed to attempting to modify an alert product instead so it can be make lucrative. Determine the break even point: Break-Even Point in Units = Total Fixed cost / Contribution Margin per Unit Break-even point in Units = 21,000 rent, periodic + 99,000 salaries, one-year / 11.60 Break even point in Units = 10,345 haircuts 3.

Operating income is a footstep of a companys earning power from on-going operations, equal to earnings in advance deduction of interest payments and income taxes. The direct income for 20,000 haircuts: Revenues - variable costs - rooted(p) costs = operating income 20,000 haircuts x $12 = $240,000 $0.40 shampoo x 20,000 = $8,000 $1,750 rent x 12 months = $21,000 50 weeks x (9.90/hour x 40 hours) x 5 barbers = $99,000 $240,000 - $8,000... If you want to get a full essay, order it on our website: Ordercustompaper.com

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