# Determine the annual break-even point, in number of haircuts. Support your answer with an appropriate explanation.

Consider the following scenario:
Styling. Andre has five barbers working for him. (Andre is not one
of them.) Each barber is paid \$9.90 per hour and works a 40-hour
week and a 50-week year, regardless of the number of haircuts. Rent
and other fixed expenses are \$1,750 per month. Hair shampoo used on
all clients is \$0.40 per client. Assume that the only service
performed is the giving of haircuts (including shampoo), the unit
price of which is \$12. Andre has asked you to find the following
information.
Find the contribution margin per haircut. Assume that the
barbers’ compensation is a fixed cost. Show calculations to support
income if 20,000 haircuts are performed? Show calculations to
The barbers will receive \$4 per hour plus \$6 for each haircut. What
is the new contribution margin per haircut? What is the annual
break-even point (in number of haircuts)? Show calculations to

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