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Moss River Fast Lube does oil changes on vehicles in 1 5 minutes or less. The variable cost associated with each oil change is $
Moss River Fast Lube does oil changes on vehicles in minutes or less. The variable cost associated with each oil change is $oil filter, and minutes of employee time The fixed costs of running the shop are $ each month store manager salary, depreciation on shop and equipment, insurance, and property taxes The shop has the capacity to perform oil changes each month.
Read the requirements.
Requirement a Total cost of performing oil changes in May.
Determine the formula, then calculate the current total product cost of performing oil changes in May.
Requirement b Average cost of performing each oil change in May.
Determine the formula, then calculate the current average cost per oil change.
Average cost per oil change
Requirement c Marginal cost of performing an oil change in May.
The marginal cost of performing an oil change in May is
Requirement If the company could reach full capacity one month, what would the total cost be
If the company could reach full capacity one month, the total cost would be
Requirement e At full capacity, what would the average cost be of each oil change? Enter your answer to the nearest cent.
At full capacity, the average cost of each oil change would be
Requirement Could Moss River Fast Lube offer more competitive 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 shop could offer its service at a price point in order to stay competitive in the market.
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