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Chapter 16: Q12SE (page 888)

Calculating unit cost per service

Marx and Tyler provides hair-cutting services in the local community. In February, the business cut the hair of 190 clients, earned \(4,800 in revenues, and incurred the following operating costs:

Hair Supplies Expense \) 950

Wages Expense 548

Utilities Expense 190

Depreciation Expense—Equipment 60

What was the cost of service to provide one haircut?

Short Answer

Expert verified

The cost to service to provide one haircut is $9.2

Step by step solution

01

Computation of total cost

TotalCost=Wages+HairSupplies+Utilitiesexpense+Depreciationexpense=$548+$950+$190+$60=$1,748

02

Computation of Cost to service to provide one haircut

Costtoservicetoprovideonehaircut=TotalcostTotalnumberofunits=$1,748190=$9.2

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Most popular questions from this chapter

Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:

a. Salaries of scientists studying ways to speed forest growth.

Computing cost of goods sold and operating income, merchandising company

Consider the following partially completed income statements for merchandising companies and compute the missing amounts:

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Gross Profit 40,000 114,000

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Certain item descriptions and amounts are missing from the monthly schedule of cost of goods manufactured and income statement of Elly Manufacturing Company. Fill in the blanks with the missing words, and replace the Xs with the correct amounts.

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Consider the following partially completed schedules of cost of goods manufactured. Compute the missing amounts.

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