Based on the picture If the shop worked on 75 vehicles what is the operating leverage Section BThomson Mechanic Shop employs three (3) mechanics. One mechanic serves as the supervisor andis paid $2,000 per month. The other two mechanics are paid $1,200. In addition, each mechanic ispaid a commission of $10 per vehicle. Other monthly costs incurred by the Shop includes rent $2,500Plus $40 per vehicle, depreciation on equipment $1,000, $100 is spent on mechanic supplies pervehicle, utilities cost $200 monthly and advertising $500 monthly. The price of servicing a vehicle atThompson is $350.00. Your friend who is completing her internship at Thomson has reached askedfor assistance in calculating the following for Thomson.

Given, Price of servicing a vehicle (Sales) = $ 350 Contribution = Sales - variable cost…

Answered: Based on the picture If the shop worked…

Business

Accounting

Based on the picture If the shop worked on 75 vehicles what is the operating leverage

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Based on the picture If the shop worked on 75 vehicles what is the operating leverage

Section B
Thomson Mechanic Shop employs three (3) mechanics. One mechanic serves as the supervisor and
is paid $2,000 per month. The other two mechanics are paid $1,200. In addition, each mechanic is
paid a commission of $10 per vehicle. Other monthly costs incurred by the Shop includes rent $2,500
Plus $40 per vehicle, depreciation on equipment $1,000, $100 is spent on mechanic supplies per
vehicle, utilities cost $200 monthly and advertising $500 monthly. The price of servicing a vehicle at
Thompson is $350.00. Your friend who is completing her internship at Thomson has reached asked
for assistance in calculating the following for Thomson.

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