Question: Quick Oil, LLC is a company that does one thing; provides oil changes for automobiles. The company identified the total variable expenses per car/per oil
Quick Oil, LLC is a company that does one thing; provides oil changes for automobiles. The company identified the total variable expenses per car/per oil change is $9.
The fixed expenses at Quick Oil, LLC. (rent, heat, etc.) per week is $2,400, and will not increase when an additional car is serviced.
Revenues (or sales) at Quick Oil, LLC are the amounts earned from servicing cars. The company charges one flat fee of $24 for performing the oil change service. For $24 the company changes the oil and filter, adds needed fluids, adds air to the tires, and inspects engine belts.
At the present time no other service is provided and the $24 fee is the same for all automobiles regardless of engine size.
The marginal profit per car is:
| A. | 12 | |
| B. | 15 | |
| C. | 24 | |
| D. | 9 |
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
