Cut This and That provides special-occasion haircuts and generates average revenue of $71 per customer....
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Cut This and That provides special-occasion haircuts and generates average revenue of $71 per customer. The salons fixed costs are $47,000 per year, which include rent, utilities and magazine subscriptions. Its variable costs are $17.75 per customer. Target operating income for the year is $87,000.
Do not enter dollar signs or commas in the input boxes. a) Calculate the revenues needed to obtain the target operating income. Round the Contribution Margin ratio to 2 decimal places. Round all other answers to the nearest whole number. CM ratio: Answer
% Required CM: $Answer
Revenue: $Answer
b) How many haircuts have to be provided to earn an operating income of $78,000? To break-even? Round up to the nearest whole unit. BEP: Answer
Haircuts to yield $78,000: Answer
c) Calculate the operating income if 4,500 haircuts are provided. Round to the nearest whole number. Operating Income: $Answer
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