17. You run a nail salon. Fixed monthly cost is $5,674.00 for rent and utilities, $6,248.00 is spent in salaries and $1,506.00 in insurance. Also every customer requires approximately $4.00 in supplies. You charge $114.00 on average for each service. You are considering moving the salon to an upscale neighborhood where the rent and utilities will increase to $10,610.00, salaries to $6,327.00 and insurance to $2,438.00 per month. Cost of supplies will increase to $7.00 per service. However you can now charge $172.00 per service. At what point will you be indifferent between your current location and the new location?
17. You run a nail salon. Fixed monthly cost is $5,674.00 for rent and utilities, $6,248.00 is spent in salaries and $1,506.00 in insurance. Also every customer requires approximately $4.00 in supplies. You charge $114.00 on average for each service. You are considering moving the salon to an upscale neighborhood where the rent and utilities will increase to $10,610.00, salaries to $6,327.00 and insurance to $2,438.00 per month. Cost of supplies will increase to $7.00 per service. However you can now charge $172.00 per service. At what point will you be indifferent between your current location and the new location?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
17. You run a nail salon. Fixed monthly cost is $5,674.00 for rent and utilities, $6,248.00 is spent in salaries and $1,506.00 in insurance. Also every customer requires approximately $4.00 in supplies. You charge $114.00 on average for each service.
You are considering moving the salon to an upscale neighborhood where the rent and utilities will increase to $10,610.00, salaries to $6,327.00 and insurance to $2,438.00 per month. Cost of supplies will increase to $7.00 per service. However you can now charge $172.00 per service. At what point will you be indifferent between your current location and the new location?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education