- variable cost $ 0.40 shampoo
= cont margin $ 11.60 = $12 - $0.40
2.Determine the annual break-even point, in number of haircuts. Support your answer with an appropriate explanation. Show calculations to support your answer. Break-even point is the level at which the amount of sales revenue equals the expenses, therefore, canceling out any net income. The formula is to divide the Total Fixed costs by the Contribution Margin. In this example, to find the annual breakeven point, extra calculations were made to bring all variables into the correct units. Andre needs to sell 10,345 hair cuts a year in order to break even (please see calculations below): fixed cost$120,000.00 = ($9.90/hr * 5 BARBERS * 40hrs/wk * 50wks/yr) + ($1750 monthly rent * 12 months)
/cont margin$ 11.60 from q1
break even 10,344.83 = $120k / $11.60
3.What will be the operating income if 20,000 haircuts are performed? Show calculations to support your answer. To find the net income for 20k...