This memorandum presents a survey to analyze the labor price estimates for the repair center. This can be estimated in various ways based on past data. It will be necessary to first break down different charges. Cost-volume or stepwise evaluation is treated as a variable charge but it depends on the situation where it is being performed. Step-wise fee is fixed and stays the same for a limited array of volumes. However, the curvilinear cost differs with time (Wild and Shaw 59). There are multiple considerations that need to be made. In a normal situation in the industry, some shops would perform faster than others meaning they are ahead of the curve while others are slow and charge more. It will be unethical to lean on increasing billable hours.
The fact is that people will be more than willing to pay for services that are completed timely and with precise results. This is the reason why people prefer dealers to road-side mechanics. In the underlying analysis, the data required is only for the specific location. However, it will lack adequate industry comparisons since it will give time consumption for that shop only. I would divide it into jobs such as maintenance, including a tire rotation, oil changes, and routine services for direct labor analysis.
For primary services, jobs to be considered would include engine overhaul and transmission replacement. It will also be essential to break it down from job type to the time taken to complete and the equipment’s required. In most cases, when automotive surveys are conducted, each job has an average time depending on the tools used. For instance, where manual instruments are used, much time is spent compared to automated apparatuses. Therefore, it will be essential to look for overall job completion average-time for the slowest and fastest jobs due to various tools. This way, it will determine how the specific section can be improved.
Work Cited
Wild, John J., and Ken W. Shaw. Fundamental Accounting Principles. 25th ed., McGraw-Hill, 2019.