Jenny's Cutting Station is 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 $.55 each.She also provides shampoo and conditioner for each client at a cost of $.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?
A)$9,200.
B)$13,000
C)$11,000
D)$8,000

Question

Quizplus · Accepted Answer

Fixed costs include employee salaries ($1,200 x 5 = $6,000), rent and overhead ($2,000), and Jenny's salary ($5,000), totaling $13,000. Variable costs like combs and shampoo are not included in fixed costs.

Jenny's Cutting Station Is a New Concept in Haircuts; Low