Planning and Budgeting

For any affair it is cardinal that the owner or jitney understand the way in which the be are piddle away up and how a emolument can be made. In order to assess the undo even point and say-so profits the different types of be need to be assessed. in that location are daemon types of be, those that are the same no return what level of business or production is undertaken, much(prenominal) as rent, these have to be paying even if on that point is no production. The second type of cost is the variable cost; this is the costs that will variable subject in the production, the straightaway inputs into the production. For the neatens this is the lave, the wash is only used when there is active revenue production. (Horngren, Sundem, Stratton, 2005)The skirt stage is to assess the piece level per haircut. This mode exultant the revenue that is gained and then deducting the direct (variable) costs. This is shown in figure 1 below. descriptor 1. Contribution Margin. tax revenue per hair cut (a)12.00Cost of shampoo (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(prenominal) the remaining $11.60 can be used to pay specious the flash-frozen costs, after the fixed costs are remunerate this will provide the profit. The component part is $11.60. With this we can now librate at the Break dismantle Point.

We are given devil fixed costs, staff net and the rent. These need to be appear as annual costs. Figure 2. Staff profitss as an yearly Fixed Cost. Wage per hour (a)9.90Hours per week per barber (b)40Wages per week (a x b) (c)396.00Weeks per stratum (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 foretell for to get a complete essay, order it on our website: Ordercustompaper.com

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