Relevant cost Qn 8

QUESTION EIGHT - Relevant Costs KISU Lid is a garage business located at Tabata in Ilala-Der es Salaam; the business has an old car that was bought in 2017 for TZS 7,000,000. This car require a reconditioned engine to operate, a reconditioned engine is available at 775 3,000,000, To fit the engine requires seven hours work of a fully employed and well trained mechanic who is paid 723 12,000 an hour, The basic working hours of fully employed mechanics is eight (8) hours a day. KIEU Led has an option of selling the car without a reconditioned engine at an estimated price of TZS 8,000,000. Required Assume there is spare capacity, determine the minimum price at which KISU Led should sell the car with a reconditioned engine fitted? Assume there is no spare capacity and that il' a mechanic is to be put on the engine- replacement job, it will mean that other work that the mechanic could have done during the seven hours, all of which could be charged to a customer. will not be undertaken, The garage's labour charge is TXS 40,000 an hour, though the mechanic is only paid TZS 12,000 an hour. What is the minimum price at which the garage should sell the car, with a reconditioned engine fined, under these altered circumstances