Andre's Hair Stylling employs 5 barbers at $9.90 per hour, 40 hours per week, and 50 weeks per year. The salary rate applies regardless of the number of haircuts performed by the barber. Fixed expenses total $1,750 per month and the cost for shampoo per client is $0.40. The total cost for each hair cut is $12.00. Using this data, I found the following information. 1. Contribution margin is sales revenue less variable costs. It is the amount available to pay for fixed …showed first 75 words of 369 total…

…showed last 75 words of 369 total…per Unit 50 weeks x ($4.00/hour x 40 hours) x 5 barbers = $40,000 Break even in units = 21,000 rent, yearly + 40,000 salaries / $5.60 Break even in units = 10,893 haircuts References: Horngren, C., Sundem, G. & Stratton, W. (2005). Introduction to Management Accounting. Upper Saddle River, NJ: Pearson Prentice Hall. Operating Income and Operating Profit Margin. Retrieved June 27, 2006 from http://beginnersinvest.about.com/cs/investinglessons/l/bloperincmarg.htm?terms=profit+margin Contribution Margin. Retrieved June 28, 2006 from http://en.wikipedia.org/wiki/Contribution_margin_analysis