Question

1. Suppose that a small hair styling salon had revenues of $150,000 in a given year. The owner spent $10,000 on utilities, $60,000 on supplies (shampoo, conditioner, hair coloring and other chemicals, etc.), and $50,000 on equipment (mirrors, chairs, scissors, curling irons, etc.), including maintenance. The owner could have earned $50,000 working at another

Answer 1

This can be solve by solving first the net profit of the salon and compare it with money if he works at another salon.

Net profit = gross profit – expenses

Net profit = $150,000 – ($10,000 + $60,000 + $50,000)

Net profit = $30,000

$50,000 - $30,000 = $20,000

The owner could earn more if he work at the other salon