Alan Daniluk owns and operates an auto service shop in London, Ontario, that he has been running for the past five years. Alan’s Autos provides various services, including lighting, suspension systems, tire balancing and rotation, wheel alignment, and oil changes. Alan built the business around providing high-quality service at a reasonable price.

Alan was recently reviewing his sales records by service type and noticed that over the previous three weeks, the revenue from oil changes had dropped significantly. He asked around and discovered another local auto shop had lowered its oil change price, likely causing his loss in market share. He decided to adjust his price as well to try to stay competitive, but wanted to know what his current costs were to provide an oil change so that he doesn’t lose money on the service. He spent a couple of hours reviewing the shop’s video surveillance to determine the labour cost of each oil change and to see if he could make any improvements to the service.

Alan broke down the different stages of both the check-in and the service itself to smaller sections and timed them. He prepared the table below with the results for one employee, Mike Panachetti, and now needs help calculating how much time the service should take for typical employees and calculating the labour cost of the service based on his hourly wages.

Calculate the normal time and standard time for Mike to complete an oil change. He knows that Mike is an experienced employee who can perform the oil changes quickly, so use a performance rating of 1.1 when calculating normal times. Use an allowance factor based on job time of 12.5% for calculating standard times to allow for paid breaks. Then calculate the total cost of providing the service, assuming Mike is paid $30/hour. How much would you charge for this service?