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pixiedust7891 pixiedust7891
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4 months ago
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 for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickly, she 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. 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. Calculate Jenny's net operating income assuming 1,400 haircuts this month.

▸ $2,900

▸ $3,800

▸ $1,700

▸ $6,500
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Managerial Accounting

Managerial Accounting


Edition: 4th
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madizmmadizm
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4 months ago
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$1,700

($12.00 - ($0.95 + $0.55) × 1,400) = $14,700; $14,700 - ((5 × $1,200) + $2,000 + $13,000 = $1,700
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