Will the garage in Activity 7.4 seek to sell the car with its reconditioned engine for 3,800?

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Will the garage in Activity 7.4 seek to sell the car with its reconditioned engine for £3,800?

Activity 7.4

A garage business has an old car that it bought several months ago. The car needs a replacement engine before it can be driven. It is possible to buy a reconditioned engine for £300. This would take seven hours to fit by a mechanic who is paid £15 an hour. At present the garage is short of work but the owners are reluctant to lay off any mechanics or even to cut down their basic working week. This is because skilled labour is difficult to find and an upturn in repair work is expected soon.
The garage paid £3,000 to buy the car. Without the engine it could be sold for an estimated £3,500. What is the minimum price at which the garage should sell the car with a reconditioned engine fitted?

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Accounting And Finance For Non-Specialists

ISBN: 9781292244013

11th Edition

Authors: Eddie McLaney, Peter Atrill

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Question Posted: Mar 14, 2024 01:01 AM

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Will the garage in Activity 7.4 seek to sell the car with its reconditioned engine for 3,800?

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No it will not It will normally try to sell it for the ma...View the full answer

Accounting And Finance For Non-Specialists

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