Answer:
Variable costs per hair cut: =$12
Total fixed costs: =$12,840
Explanation:
Variable costs are the cost that changes depending on the output level. For this barbers shop, variable costs are
Barbers commission= $11.40
Barber supplies: $0.45
supplies $0.15
Total variable cost per hair cut
= $11.40 + $0.45 + $0.15
=$12
Fixed costs will be the constant costs throughout the year. They will be the same months after month.
Fixed costs for the barber shop will be
Base rate : $1570 x 7 =$10,990
Managers extra pay = $525
Advertising = $240
Rent $900
Utilities $150
Magazines $35
Total fixed cost
=$10,990 + $525, + $240, + $900, + $150, + $35
=$12,840
