Andre has asked you to evaluate his business, Andreâ??s HairStyling. Andre has five barbers working

Andre has asked you to evaluate his business, Andreâ€s HairStyling. Andre has five barbers working for him. (Andre is not oneof them.) Each barber is paid $9.90 per hour and works a 40-hourweek and a 50-week year, regardless of the number of haircuts. Rentand other fixed expenses are $1,750 per month. Hair shampoo used onall clients is .40 per client. Assume that the only serviceperformed is the giving of haircuts (including shampoo), the unitprice of which is $12. Andre has asked you to find the followinginformation. Find the contribution margin per haircut. Assume thatthe barbers’ compensation is a fixed cost. Show calculations tosupport your answer. Determine the annual break-even point, innumber of haircuts. Support your answer with an appropriateexplanation. Show calculations to support your answer. What will bethe operating income if 20,000 haircuts are performed? Showcalculations to support your answer. Suppose Andre revises thecompensation method. The barbers will receive $4 per hour plus $6for each haircut. What is the new contribution margin per haircut?What is the annual break-even point (in number of haircuts)? Showcalculations to support your answer.

 

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