Southfield Stylers, with three chairs, offers a no-frills hair style service at a single price....
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Accounting
Southfield Stylers, with three chairs, offers a nofrills hair style service at a single price. The price of $ and the variable cost of $ per customer remain constant regardless of volume. The owner can handle additional volume by hiring oncall stylists to staff the two additional chairs if demand is sufficient. Southfield pays the oncall stylists for one full week regardless of actual demand that week. Southfield has three choices every week, as follows:
Weekly Volume Range
Number of Customers Total Fixed Costs
Chair $
Chairs
Chairs
Required:
a Calculate the breakeven points
b Calculate the profit or loss for each alternative, assuming sufficient demand to keep all chairs busy.
b Should Southfield operate with one, two, or three chairs?
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