V & S Mechanical sells and services plumbing, heating, and air conditioning systems. V & S$\text{'}$s cost accounting system tracks two cost categories: direct labor and direct materials. V & S uses a time$-$and$-$materials pricing system, with direct labor marked up $100\%$ and direct materials marked up $50\%$ to recover indirect costs of support staff, support materials, and shared equipment and tools and to earn a profit.

$($Click the icon to view the cost information.$)$

Read the requirements.

Requirement $1.$ If Dryden presents Lowry with the replace or repair options, what price would he quote for each?

Complete the table below to determine the price Dryden would quote for each option.

Labor

Repair option

Replace option

Materials

Total Price

Total Price

Requirement $2.$ If the two options were equally effective for the $3$ years that Lowry intends to live in the home, which option would she choose?

Lowry is likely to choose to the compressor.

Requirement $3.$ If Dryden's objective is to maximize profits, which option would he recommend to Lowry? What would be the ethical course of action?

If Dryden is interested in maximizing profits, he may be tempted to The ethical course of action would be to

Data table

During a hot summer day, the central air conditioning in Linda Lowry's home stops working. V & S technician Tom Dryden arrives at Lowry's home and inspects the air conditioner. He considers two options: replace the compressor or repair it$.$ The cost information available to Dryden follows:

$\backslash$table$[[,$Labor,Materials$],[$Repair option,$5$ hrs$.,$$$160$