COST ACCOUNTING
BREAK EVEN POINT
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Question
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Brian and Amy invest $2700 to start a hair cutting business. Each hair cut costs them $1.50 (supplies). They charge their customer $15 for each cut.The equations are:Cost:y = 1.50x + 2700Income:y = 15xWhat does the y-intercept in the cost equation represent?
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y-intercept = $1.50 (costs 1.50 in supplies for the haircut)
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y-intercept = $2700 (there are up front costs of $2, 700)
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y-intercept = 15 (costs $15 in supplies per haircut)
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y-intercept = 0 (there are no up front costs or fees)
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Explanation:
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