In a recent personal experience, I had the opportunity to explore managerial accounting concepts in the context of an auto repair service. During a visit to Five Star Lopez, a local auto repair shop, I had two tires changed and an oil service performed, prompting me to delve into the cost and profit dynamics of this transaction. The billing invoice revealed a total cost of $397 for the services, comprising two tires at $176 each and an oil change at $45. To estimate the total cost incurred by Five Star Lopez, I considered industry profit margins, finding that the shop had a 25% profit margin on each tire and a 55% profit margin on non-parts sale services, such as the oil change. This analysis led to a calculated total cost of $284.25, encompassing direct materials, direct labor, and manufacturing overhead costs. Notably, this figure excludes additional operational costs like labor and utilities. The computation of the total profit made by Five Star Lopez on my car service involved subtracting the total cost from the revenue earned. With a revenue of $397 and a total cost of $284.25, the auto repair shop made a profit of $112.75 on my visit. This real-life example not only solidified my understanding of cost classification and behavior but also emphasized the importance of considering various cost components for accurate profit analysis.

Can you just write out the work with the formulas and make sure I did the work correctly please?