Question

Zorah, a musician, pays $120 to have her instrument tuned and $10 per hour for a booth at a fair. She estimates that she earns$25 per hour in tips. The equation can be used to represent the break even point.

Answer 1

To break-even, Zorah needs to play for 8 hours.

Explanation:

To calculate the break-even point in hours, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 120 / (25 - 10)

Break-even point in units= 8 hours

To break-even, Zorah needs to play for 8 hours.