Planning and Budgeting

For any championship it is consequential that the owner or bus understand the way in which the be are bedevil up and how a pull ahead can be made. In order to assess the despoil even point and electromotive force profits the different types of be need to be assessed. in that location are twain types of greets, those that are the same no return what level of business or production is undertaken, much(prenominal) as rent, these have to be nonrecreational even if at that place is no production. The second type of cost is the variable cost; this is the cost that will variable pendant in the production, the straight inputs into the production. For the neatens this is the lave, the lave is only used when there is active revenue production. (Horngren, Sundem, Stratton, 2005)The accede stage is to assess the piece level per haircut. This convey jubilant the revenue that is gained and then deducting the direct (variable) costs. This is shown in figure 1 below. see 1. Contribution Margin. taxation per hair cut (a)12.00Cost of wash (b)0.40Contribution (a-b) (c)11.60As a % ((c/a) x 100))96.67%This means that it costs $.40 per haircut and as such the remaining $11.60 can be used to pay faux the resolute costs, after the fixed costs are share this will provide the profit. The theatrical role is $11.60. With this we can now social function at the Break plain Point.

We are given two fixed costs, staff pay and the rent. These need to be envision as annual costs. Figure 2. Staff profitss as an one-year Fixed Cost. Wage per hour (a)9.90Hours per week per neaten (b)40Wages per week (a x b) (c)396.00Weeks per course of instruction (d)50Wage per barber per year (c x d) (e)19,800.00Number of barbers (f)5Wages per year (e x f)99,000.00Figure 3. Annual Rent. Monthly (a)1750Annually (a x 12)21000These... If you blackguard for to get a full phase of the moon essay, order it on our website: Ordercustompaper.com

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