Breakeven Analysis. Betty's Boutique, Inc. is a beauty salon specializing in full-service beauty treatments: facials, manicures, waxes and tanning booths. The business manager for Betty's has been asked by the owner to prepare a financial analysis of the potential of an extended hours operation. Such a move would require remodeling the facility and the hiring of additional staff. Estimated first year expenses for an extended hours operation are:
Beautician and staff salary expenses are estimated on an hourly basis, reflecting additional salary and overtime costs. Supplies and remodeling expenses are above and beyond those required for normal facility operations. Equipment costs represent a prorated share of the centers fixed equipment-leasing costs. Electricity costs of $4,000 reflect additional anticipated usage, whereas heat and taxes of $5,000 reflect an allocated share of fixed beauty shop expenses.

Question

Breakeven Analysis. Betty's Boutique, Inc. is a beauty salon specializing in full-service beauty treatments: facials, manicures, waxes and tanning booths. The business manager for Betty's has been asked by the owner to prepare a financial analysis of the potential of an extended hours operation. Such a move would require remodeling the facility and the hiring of additional staff. Estimated first year expenses for an extended hours operation are:
  Beautician and staff salary expenses are estimated on an hourly basis, reflecting additional salary and overtime costs. Supplies and remodeling expenses are above and beyond those required for normal facility operations. Equipment costs represent a prorated share of the centers fixed equipment-leasing costs. Electricity costs of $4,000 reflect additional anticipated usage, whereas heat and taxes of $5,000 reflect an allocated share of fixed beauty shop expenses.

Quizplus · Accepted Answer

The Answer of Breakeven Analysis. Betty's Boutique, Inc. is a beauty salon specializing in full-service beauty treatments: facials, manicures, waxes and tanning booths. The business manager for Betty's has been asked by the owner to prepare a financial analysis of the potential of an extended hours operation. Such a move would require remodeling the facility and the hiring of additional staff. Estimated first year expenses for an extended hours operation are:
  Beautician and staff salary expenses are estimated on an hourly basis, reflecting additional salary and overtime costs. Supplies and remodeling expenses are above and beyond those required for normal facility operations. Equipment costs represent a prorated share of the centers fixed equipment-leasing costs. Electricity costs of $4,000 reflect additional anticipated usage, whereas heat and taxes of $5,000 reflect an allocated share of fixed beauty shop expenses.