In order to get the answer for number 1, we need to figure the contribution method. In order to get that answer we take the $12 unit price - .40 which is the per client equals a total of $11.60.
REQUIREMENT NUMBER 1
$12 - .40 = $11.60

Moving on to Requirement number 2, Andre is seeking the breakeven point. In order to figure that out we need find the annual breakeven point, barbers salaries, annual rent which will give us a total cost then we can get the formula to figure out the breakeven point. For the annual break even points we need to take the total fixed cost and divide it by the contribution margin. Barbers salaries formula is 5 employees * 9.90 per hour wage * 40 hrs per week * 50 weeks equals $99,000. Annual Rent is 12 months * $1750 monthly = $21,000 per year. Total cost take the barbers salaries ($99,000) + annual rent ($21,000) equals $120,000. Break Even point you take the total cost ($120,000) / (12 - .40) equals 10345 haircuts.
REQUIREMENT NUMBER 2
BARBERS SALARIES
5 * 9.90 * 40 * 50 = $99,000 ANNUAL RENT
12 * $1750 = 21,000 TOTAL COST
$99,000 + $21,000 = $120,000 B.E. POINT
$120,000 / (12 -. 40) = 10,345 HAIR CUTS

Requirement number 3 is seeking the revenue, variable cost, and operating income. First we need to figure out the revenue. Take 20,000 haircuts * $12 hair cut price equals $240,000. Variable cost we need to take the per client shampoo price .40 * 20,000 haircuts equals 8,000. Operating income we take the revenue $240,000 - ($120,000 total cost + 8,000 variable cost) equals $112,000

REQUIREMENT NUMBER 3
REVENUE
20,000 * $12 = $240,000 VARIABLE COST
.40 * 20,000 = 8,000 OPERATING INCOME
$240,000 - ($120,000 + 8,000 ) = $112,000

Requirement