Revisit the current operation of Andre's Hair Styling (studyproblem 2-44):
haircut price - $12.00
barber salaries - $9.90 per hour, 5 barbers, 40 hours per week,50 weeks per year
annual miscellaneous fixed costs - $21,000
Andre is considering the following plan, in which he would raisehaircut prices and barber salaries. In addition, annualmiscellaneous fixed costs are expected to increase:
increase in haircut price - $1.25
increase in barber salaries - $0.95 per hour
increase in annual miscellaneous fixed costs - $17,475
Although Andre thinks that he will get the same number ofcustomers with this new plan as with his current operation, he isuncertain what that number will be. How many customers would makeAndre indifferent between the two alternatives?
Revisit the current operation of Andre's Hair Styling (studyproblem 2-44):
haircut price - $12.00
barber salaries - $9.90 per hour, 5 barbers, 40 hours per week,50 weeks per year
annual miscellaneous fixed costs - $21,000
Andre is considering the following plan, in which he would raisehaircut prices and barber salaries. In addition, annualmiscellaneous fixed costs are expected to increase:
increase in haircut price - $1.25
increase in barber salaries - $0.95 per hour
increase in annual miscellaneous fixed costs - $17,475
Although Andre thinks that he will get the same number ofcustomers with this new plan as with his current operation, he isuncertain what that number will be. How many customers would makeAndre indifferent between the two alternatives?
