Marx and Springsteen provides hair-cutting services in the local community. In February, the business cut the hair of 200 clients, earned $ 5,100 in revenues, and incurred the following operating costs:

Hair saloon expense: $500

Building rent expense: 1458

Utilities expense: 200

Depreciation expense-- - Equipment: 50

Required:

What was the cost of service to provide one haircut?

Cost of service to provide one haircut is $ 11.04

Explanation:

Hair saloon expense: $500

Building rent expense: $1,458

Utilities expense: $200

Depreciation expense - - - Equipment: $50

Total operating cost = Hair saloon expense + Building rent expense + Utilities expense + Depreciation expense

= $500 + $1,458 + $200 + $50

= $ 2,208

Total hair cuts = 200

Therefore, cost per hair cut = Total operating cost : Total hair cuts

= $2,208 : $200

= $ 11.04