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Jenny's Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local ...

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Jenny's Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local ...

Jenny's Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Jenny's offers 15-minute haircuts with a shampoo for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickly, Jenny schedules her 5 employees based on expected client traffic. Each of the employees is paid $1,200 per month, with part of their pay coming from client tips. Jenny pays rent and overhead costs of $2,000 per month for the facility. Because of the quick nature of the service, Jenny doesn't have time to clean combs in between clients, so she uses a new comb for each customer, at a cost of $0.55 each. She also provides shampoo and conditioner for each client at a cost of $0.95 per client. The average price for a haircut is $12. Jenny pays herself $5,000 per month. What are Jenny's fixed costs for the month?

▸ $13,000

▸ $11,000

▸ $9,200

▸ $8,000

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Managerial Accounting

Edition: 4^th

Author: Davis

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