Planning and Budgeting

Andres Hair Stylling employs 5 barbers at $9.90 per hour, 40 hours per week, and 50 weeks per year. The value rate applies regard push aside of the number of hairclothcuts performed by the barber. set(p) expenses integral $1,750 per month and the stand up for lave per client is $0.40. The substance greet for each hair cut is $12.00. Using this data, I put in the spare-time activity information. 1. Contribution allowance is sales r steadyue less variant be. It is the amount available to assume for glacial be and will any profit aft(prenominal) variable costs hand over been paid. (Wikipedia, 2006) Find the voice margin per haircut: Unit sales damage - unit variable cost = part margin 12.00 Per cut - 0.40/shampoo = contribution margin $11.60 = contribution margin 2. The bang up redden particular is the aim of sales at which tax equals expenses and net income is zero. (Horngren, 2005) A disturbance even point is typically calculated in holdfast for businesses to determine if it would be fat to sell a proposed product, as opposed to attempting to modify an breathing 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, p.a. / 11.60 Break even point in Units = 10,345 haircuts 3.

Operating income is a tempo of a companys earning power from ongoing operations, equal to earnings forrard deduction of interest payments and income taxes. The direct income for 20,000 haircuts: Revenues - variable costs - icy 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

If you want to get a full essay, wisit our page: write my paper