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underlying your pro P5-17: Beckett Automotive Group Ford, Lexus, and Subaru). Beckett also consists of a Pre-owned Cars Department and a large service Beckett
underlying your pro P5-17: Beckett Automotive Group Ford, Lexus, and Subaru). Beckett also consists of a Pre-owned Cars Department and a large service Beckett is a large car dealership that sells several automobile manufacturers' new cars (Toyota, department. Beckett is organized into three profit centers: New Cars, Pre-owned Cars, and Service, Each profit center has a manager who is paid a fixed salary plus a bonus based on the net income generated in his or her profit center. Once they have agreed on a price for the new car, if the customer has a used car to trade in, the Pre-owned Cars Department manager gives the customer a price for the trade in. If the customer agrees with the trade-in price offered by Pre-owned Cars, the customer pays the difference between the price of the new car and the trade-in price. cus tomer receives and accepts $11,000 for the trade-in of her used car and pays the balance of $36,000 in cash (ignoring taxes and license). In this case, New Cars shows a profit of $800 (before any com- mission to the salesperson). If the customer does not accept the trade-in value, she does not purchase the new car from Beckett. Once the deal is struck, the trade-in is then either sold by Pre-owned Cars to another customer at retail or is taken to auction where it is sold at wholesale. Continuing the preceding example, suppose the customer accepts $11,000 as the trade-in for her used car. The Pre-owned Cars Department can sell it on its used car lot for $15,000 at retail or sell it at auction for $12,000. If the trade-in is sold for
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