1)

Andre's Hair Styling

Unit
Price
$12
Variable Costs
$0.40
Contribution Margin
$11.60
Fixed Costs:
Barbers' Compensation $99,000
Other Fixed Costs
$21,000
Total Fixed Costs
$120,000

3)
Number of Haircuts
20000
Andre's Hair Styling
Unit
Price
$12
Variable Costs
$0.40
Contribution Margin
$11.60
Fixed Costs:
Barbers' Compensation $99,000
Other Fixed Costs
$21,000
Total Fixed Costs
$120,000
Operating Income
4)
Andre's Hair Styling
Unit
Price
$12
Variable Costs:
$0.40
Shampoo
$0.40
Direct Labor
$6.00
Total Variable Costs
$6.40
Contribution Margin
$5.60
Fixed Costs:
Barbers' Compensation $40,000
Other Fixed Costs
$21,000
Total Fixed Costs
$61,000

Total
$240,000
$8,000
$232,000
$99,000
$21,000
$120,000
$112,000