Labor costs of an auto repair mechanic are seldom based on actual hours worked. Instead, the labor cost is based on an industry average of time estimated to complete a repair job. This means a customer can pay, for example, $120 for two hours of work on a care when the actual time worked was only one hour. Many experienced mechanics can complete repair jobs faster than the industry average. Assume that you are asked to complete such a survey for a repair center. The survey calls for objective input, and many questions require detailed cost data and analysis. The mechanics and owners know you have the survey and encourage you to complete it in a way that increase the average billable hours for repair work.

REQUIRED:

Write a one-page memorandum to the mechanics and owners that describes the direct labor analysis you will undertake in completing this survey.

It should have a statement about the need to be objective in the analysis. outline how cost estimation is conducted describe how regression analysis could be used. The memo should point out that the repair business should follow established business practices for setting cost estimates. Examine fairness to customers, perception repair business over charging. quality of work, and mechanic compensation