Telly Savalas owns the Bonita Barber Shop. He employs four barbers and pays
each a base rate of $1,000 per month. One of the barbers serves as the manager and
receives an extra $500 per month. In addition to the base rate, each barber also receives a
commission of $4.50 per haircut.
Other costs are as follows.
Advertising $200 per month
Rent $1,100 per month
Barber supplies $0.30 per haircut
Utilities $175 per month plus $0.20 per haircut
Magazines $25 per month
Telly currently charges $10 per haircut.