A garage buys a car: 9,000 euro. Without any renovations the car could be sold for...

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A garage buys a car: 9,000 euro. Without any renovations the car could be sold for 10,500 euro. It must be made roadworthy. Needed 4 new tyres: 4 x 100 = 400 euro. It further needs a replacement engine: reconditioned engine for 1,200 euro plus 7 mechanic labour hours (15 euro/hour). The garage is currently short of work, but all mechanics are still all employed by the garage since an upturn in demand is expected and skilled mechanics are difficult to find. Question 1: What is the minimum selling price (= relevant costs) for the renovated car? Question 2: Would the minimum selling price (= relevant costs) for the renovated car be different if the garage redeploys a mechanic to do the engine replacement job? This would mean that other work would not take place. This other work could have been charged to a customer at the rate of 60 euro an hour while the mechanic labour costs are still 15 euro an hour. A garage buys a car: 9,000 euro. Without any renovations the car could be sold for 10,500 euro. It must be made roadworthy. Needed 4 new tyres: 4 x 100 = 400 euro. It further needs a replacement engine: reconditioned engine for 1,200 euro plus 7 mechanic labour hours (15 euro/hour). The garage is currently short of work, but all mechanics are still all employed by the garage since an upturn in demand is expected and skilled mechanics are difficult to find. Question 1: What is the minimum selling price (= relevant costs) for the renovated car? Question 2: Would the minimum selling price (= relevant costs) for the renovated car be different if the garage redeploys a mechanic to do the engine replacement job? This would mean that other work would not take place. This other work could have been charged to a customer at the rate of 60 euro an hour while the mechanic labour costs are still 15 euro an hour. A garage buys a car: 9,000 euro. Without any renovations the car could be sold for 10,500 euro. It must be made roadworthy. Needed 4 new tyres: 4 x 100 = 400 euro. It further needs a replacement engine: reconditioned engine for 1,200 euro plus 7 mechanic labour hours (15 euro/hour). The garage is currently short of work, but all mechanics are still all employed by the garage since an upturn in demand is expected and skilled mechanics are difficult to find. Question 1: What is the minimum selling price (= relevant costs) for the renovated car? Question 2: Would the minimum selling price (= relevant costs) for the renovated car be different if the garage redeploys a mechanic to do the engine replacement job? This would mean that other work would not take place. This other work could have been charged to a customer at the rate of 60 euro an hour while the mechanic labour costs are still 15 euro an hour. A garage buys a car: 9,000 euro. Without any renovations the car could be sold for 10,500 euro. It must be made roadworthy. Needed 4 new tyres: 4 x 100 = 400 euro. It further needs a replacement engine: reconditioned engine for 1,200 euro plus 7 mechanic labour hours (15 euro/hour). The garage is currently short of work, but all mechanics are still all employed by the garage since an upturn in demand is expected and skilled mechanics are difficult to find. Question 1: What is the minimum selling price (= relevant costs) for the renovated car? Question 2: Would the minimum selling price (= relevant costs) for the renovated car be different if the garage redeploys a mechanic to do the engine replacement job? This would mean that other work would not take place. This other work could have been charged to a customer at the rate of 60 euro an hour while the mechanic labour costs are still 15 euro an hour. A garage buys a car: 9,000 euro. Without any renovations the car could be sold for 10,500 euro. It must be made roadworthy. Needed 4 new tyres: 4 x 100 = 400 euro. It further needs a replacement engine: reconditioned engine for 1,200 euro plus 7 mechanic labour hours (15 euro/hour). The garage is currently short of work, but all mechanics are still all employed by the garage since an upturn in demand is expected and skilled mechanics are difficult to find. Question 1: What is the minimum selling price (= relevant costs) for the renovated car? Question 2: Would the minimum selling price (= relevant costs) for the renovated car be different if the garage redeploys a mechanic to do the engine replacement job? This would mean that other work would not take place. This other work could have been charged to a customer at the rate of 60 euro an hour while the mechanic labour costs are still 15 euro an hour. A garage buys a car: 9,000 euro. Without any renovations the car could be sold for 10,500 euro. It must be made roadworthy. Needed 4 new tyres: 4 x 100 = 400 euro. It further needs a replacement engine: reconditioned engine for 1,200 euro plus 7 mechanic labour hours (15 euro/hour). The garage is currently short of work, but all mechanics are still all employed by the garage since an upturn in demand is expected and skilled mechanics are difficult to find. Question 1: What is the minimum selling price (= relevant costs) for the renovated car? Question 2: Would the minimum selling price (= relevant costs) for the renovated car be different if the garage redeploys a mechanic to do the engine replacement job? This would mean that other work would not take place. This other work could have been charged to a customer at the rate of 60 euro an hour while the mechanic labour costs are still 15 euro an hour. A garage buys a car: 9,000 euro. Without any renovations the car could be sold for 10,500 euro. It must be made roadworthy. Needed 4 new tyres: 4 x 100 = 400 euro. It further needs a replacement engine: reconditioned engine for 1,200 euro plus 7 mechanic labour hours (15 euro/hour). The garage is currently short of work, but all mechanics are still all employed by the garage since an upturn in demand is expected and skilled mechanics are difficult to find. Question 1: What is the minimum selling price (= relevant costs) for the renovated car? Question 2: Would the minimum selling price (= relevant costs) for the renovated car be different if the garage redeploys a mechanic to do the engine replacement job? This would mean that other work would not take place. This other work could have been charged to a customer at the rate of 60 euro an hour while the mechanic labour costs are still 15 euro an hour. A garage buys a car: 9,000 euro. Without any renovations the car could be sold for 10,500 euro. It must be made roadworthy. Needed 4 new tyres: 4 x 100 = 400 euro. It further needs a replacement engine: reconditioned engine for 1,200 euro plus 7 mechanic labour hours (15 euro/hour). The garage is currently short of work, but all mechanics are still all employed by the garage since an upturn in demand is expected and skilled mechanics are difficult to find. Question 1: What is the minimum selling price (= relevant costs) for the renovated car? Question 2: Would the minimum selling price (= relevant costs) for the renovated car be different if the garage redeploys a mechanic to do the engine replacement job? This would mean that other work would not take place. This other work could have been charged to a customer at the rate of 60 euro an hour while the mechanic labour costs are still 15 euro an hour. A garage buys a car: 9,000 euro. Without any renovations the car could be sold for 10,500 euro. It must be made roadworthy. Needed 4 new tyres: 4 x 100 = 400 euro. It further needs a replacement engine: reconditioned engine for 1,200 euro plus 7 mechanic labour hours (15 euro/hour). The garage is currently short of work, but all mechanics are still all employed by the garage since an upturn in demand is expected and skilled mechanics are difficult to find. Question 1: What is the minimum selling price (= relevant costs) for the renovated car? Question 2: Would the minimum selling price (= relevant costs) for the renovated car be different if the garage redeploys a mechanic to do the engine replacement job? This would mean that other work would not take place. This other work could have been charged to a customer at the rate of 60 euro an hour while the mechanic labour costs are still 15 euro an hour. A garage buys a car: 9,000 euro. Without any renovations the car could be sold for 10,500 euro. It must be made roadworthy. Needed 4 new tyres: 4 x 100 = 400 euro. It further needs a replacement engine: reconditioned engine for 1,200 euro plus 7 mechanic labour hours (15 euro/hour). The garage is currently short of work, but all mechanics are still all employed by the garage since an upturn in demand is expected and skilled mechanics are difficult to find. Question 1: What is the minimum selling price (= relevant costs) for the renovated car? Question 2: Would the minimum selling price (= relevant costs) for the renovated car be different if the garage redeploys a mechanic to do the engine replacement job? This would mean that other work would not take place. This other work could have been charged to a customer at the rate of 60 euro an hour while the mechanic labour costs are still 15 euro an hour. A garage buys a car: 9,000 euro. Without any renovations the car could be sold for 10,500 euro. It must be made roadworthy. Needed 4 new tyres: 4 x 100 = 400 euro. It further needs a replacement engine: reconditioned engine for 1,200 euro plus 7 mechanic labour hours (15 euro/hour). The garage is currently short of work, but all mechanics are still all employed by the garage since an upturn in demand is expected and skilled mechanics are difficult to find. Question 1: What is the minimum selling price (= relevant costs) for the renovated car? Question 2: Would the minimum selling price (= relevant costs) for the renovated car be different if the garage redeploys a mechanic to do the engine replacement job? This would mean that other work would not take place. This other work could have been charged to a customer at the rate of 60 euro an hour while the mechanic labour costs are still 15 euro an hour. A garage buys a car: 9,000 euro. Without any renovations the car could be sold for 10,500 euro. It must be made roadworthy. Needed 4 new tyres: 4 x 100 = 400 euro. It further needs a replacement engine: reconditioned engine for 1,200 euro plus 7 mechanic labour hours (15 euro/hour). The garage is currently short of work, but all mechanics are still all employed by the garage since an upturn in demand is expected and skilled mechanics are difficult to find. Question 1: What is the minimum selling price (= relevant costs) for the renovated car? Question 2: Would the minimum selling price (= relevant costs) for the renovated car be different if the garage redeploys a mechanic to do the engine replacement job? This would mean that other work would not take place. This other work could have been charged to a customer at the rate of 60 euro an hour while the mechanic labour costs are still 15 euro an hour.

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Lets calculate the relevant costs for the renovated car and answer both questions step by step Step 1 Calculate the relevant costs for the renovated c... View the full answer