Task

Fixed costs for the hairdressing salon are £50,000. The cost of providing the service for each customer (staff wages, materials, etc.) is £5 and the firm charges £10 for each customer. What is the number of customers the salon needs to break-even?

The answer is 10,000.

Why?

The contribution is 10 - 5, so the answer would be 50,000 / 5 = 10,000 units.