Transformations Hair Salon Uses an Activity-Based Costing System in Its

Essay

Transformations Hair Salon uses an activity-based costing system in its beauty salon to determine the cost of services. The salon has determined the costs of services by activity as follows: $$\begin{array} { | l | c | } \hline \text { Activity } & \text { Activity Rate } \\\hline \text { Hair washing } & \$ 1.50 \\\hline \text { Conditioning } & \$ 2.00 \\\hline \text { Chemical treatment } & \$ 20.00 \\\hline \text { Styling } & \$ 10.00 \\\hline\end{array}$$ a) Using the information provided, determine the cost of services for each of the following services provided by the salon: $$\begin{array} { | l | c | c | c | c | } \hline & \begin{array} { c } \text { Hair } \\\text { Washing }\end{array} & \text { Conditioning } & \begin{array} { c } \text { Chemical } \\\text { Treatment }\end{array} & \text { Styling } \\\hline \text { Haircut } & 1 & 1 & 0 & 0 \\\hline \text { Complete style } & 1 & 1 & 0 & 1 \\\hline \text { Perm } & 2 & 3 & 1 & 1 \\\hline \text { Highlights } & 3 & 4 & 2 & 1 \\\hline\end{array}$$ b) If the company budgets 10,000 haircuts, 4,000 complete styles, 3,500 perms, and 5,500 highlights, determine the budget for cost of services.