Unit F: Finance

Practice


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  1. Jules sets the prices for her hair salon as follows:

    • $30.00 per haircut
    • $65.00 for colours
    • $75.00 for perms

    These prices are lower than the salon she previously worked at since she has less overhead.

    Jules predicts she will have 40 haircuts, 10 colours, and 4 perms each month.

    1. Determine Jules' projected monthly sales revenue in the initial start-up of her business.
    2. Jules's monthly expenses are $1 008.03. Determine the net income for Jules' business.
    3. Jules needs $2 500.00 per month to live on. Is she making enough income? If not, suggest ways she can either reduce her expenses or increase her revenue.
Jules sets the prices for her hair salon as follows:

  • $30.00 per haircut
  • $65.00 for colours
  • $75.00 for perms

These prices are lower than the salon she previously worked at since she has less overhead.

Jules predicts she will have 40 haircuts, 10 colours, and 4 perms each month.

  1. Determine Jules' projected monthly sales revenue in the initial start-up of her business.
  2. Jules's monthly expenses are $1 008.03. Determine the net income for Jules' business.
  3. Jules needs $2 500.00 per month to live on. Is she making enough income? If not, suggest ways she can either reduce her expenses or increase her revenue.

  1. Multiply he number of haircuts, colours, and perms by the price of each service and then add the values together.

    Jules' Revenue
    Service
    		 Price
    		 Quantity
    		 Earnings
    haircut
    		 $30.00
    		 40
    		 $1 200.00
    colours
    		 $65.00
    		 10
    		 $650.00
    perms
    		 $75.00
    		 4
    		 $300.00
    total $2 150.00

    Jules's projected monthly sales revenue is $2 150.00.

  2. net income=revenue-expenses=$2 150.00-$1 008.03=$1 141.97


    Jules makes a profit of $1 141.97 per month.

  3. Jules is not making enough income each month. Her monthly expenses of $2 500 are more than her monthly income of $1 141.97. Reducing expenses is not an option since all the expenses are necessary to run the business. Jules should advertise to increase her clientele. She should also advertise to do weddings or other special events. Jules may wish to increase her prices for haircuts, colours, and perms. She could also find a part-time job until the business has a revenue of at least $2 500.00 per month. Jules should contact a tax specialist to determine how much money she should set aside for federal and provincial taxes.