CCH Business Focus - Hairdressers

a. from the stylists' records of work done, compute the total earnings for each one by multiplying the number of times each service was sold by the price charged and then make a grand total of all the earnings

b. total the tips received by the proprietor

c. from the purchase invoices for the month in which the trial week falls, estimate the costs for the trial week by totalling the month's expenditure and allocating a weighted proportion to the week, taking account of the level of takings in each week (ensure that the purchases include only those items which are included in Purchases in the accounts); deduct from this figure the cost of items sold retail in the trial week (see d. below)

d. calculate the total cost and selling price of the products/items sold retail by multiplying the number of sales by the individual costs and selling prices

e. total the income from chair rentals

f. identify the cost of items thrown away (wastage) or stolen (theft) in the trial week

g. calculate the gross profit (Takings less cost) and the mark up rate -

gross profit divided by cost, times 100
h. correct the 'purchases' shown by the accounts for cut-offs and to exclude any items which were

not used in providing the salon's services or
not for re-sale

before applying the calculated mark up rate to recompute sales

i. estimate the income from ancillary sources in the year/period, if not fully recorded.

Contents

Investigation matters

Business Economics Exercise