Trudeau’s Body Shop incurs total costs given by TC = 2,400 + 100 Q. If the price it charges for a paint job is $120, what is its break-even level of output?

The break-even level of output is 120 units.

Explanation:

Since Total Cost formula is provided, we can use elements contained in the formulae to determine the break-even level of output.

The  break-even level of output is the level of activity where a firm makes neither a Profit nor a Loss. In other words, Profit = $0

Step 1 : Collect data

So given :

TC = 2,400 + 100 Q

This means :

Fixed Costs = $2,400

Variable Costs = $100 per unit

Additional Information gives :

Selling Price per unit =  $120

Step 2 : Determine the break-even level of output

Break even (units) = Fixed Costs ÷ Contribution per unit

where,

Contribution per unit = Selling Price - Variable Cost

                                   = $20

thus,

Break even (units) = $2,400 ÷ $20

                              = 120 units

Conclusion :

The break-even level of output is 120 units.

i just took the test and it is financing

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough