declines increases cost the South River Fast Lube does oil changes on vehicles in 15 minutes or less. The variable cost associated with each oil change is $18 (oil, filter, and 15 minutes of employee time). The fixed costs of running the shop are $11,000 each month (store manager salary, depreciation on shop and equipment, insurance, and property taxes). The shop has the capacity to perform 4,000 oil changes eact month. Read the Requirement b. Average cost of performing each oil change in May. Determine the formula, then calculate the current average cost per cil change. = Average cost per oil change = Requirement c, Marginal cost of performing an oll change in May. The marginal cost of performing an oil change in May is Requirement d. If the company could reach full capacity one moneh, what would the fotal cost be? If the company could reach full capacity one month, the total cost would be Requirement e. At ful capachy, what would the average cost be of each oll change? (Enter your answer to the nearest cent.) At full capacity, the average cost of each oll change would be Requirement f. Could South River Fast Lube offer more compebtive pricing if it operated closer to full capacity? Explain. As the shop operates closer to full capacity, the fixed costs thereby the average cost of each oil change. As the average cost , the shep could offer its service at a price point in order to stay competive in the market. could reach full capacity one month, the total cos At full capacity, rerage cost be the average cos higher e would be Could South Ri more compet lower erates closer to fi ed costs er its service at a price point in order to thereby the average cost of ea rement d. If the company could reach full capacity on company could reach full capacity one month, the tote are spread over less oil changes rement e. At full capacity, what would the average co are spread over more oil changes capacity, the average cost of each oil change would t do not change irement f. Could South River Fast Lube offer more co shop operates closer to full capacity, the fixed costs thereby could offer its service at a price point in order to stay competitive in the market. South River Fast Lube does oil changes on vehicles in 15 minutes or less. The variable cost associated with each ol change is $18 (oil, fller, and 15 minutes f employee time). The fixed costs of running the shop are $11,000 each month (store manager salary, depreciation on shop and equipment, insurance, and property taxes). The shop has the capacity to perform 4,000 ol changes each month. Read the Requirement a. Total cost of performing 1,000 oil changes in May. Determine the formula, then calculate the current total product cost of performing 1,000 ofl changes in May. Requirement b. Average cost of performing each oll change in May. Determine the formula, then calculate the current average cost per oil change. Requirement c. Marginal cost of performing an oll change in May. The marginal cost of performing an oil change in May is Requirement d. If the compary could reach fult capacity one month, what would the fotal cost be? If the company could reach full capacily one month, the total cost would be Requirement e. At full capacity, what would the average cost be of each ol change? (Enter your answer to the nearest cent.)
