The new quarter panel that must be replaced on the customer’s car costs $450.00. The allowable labor time to replace the part is 12.5 hours. You have the opportunity to purchase a recycled part for $275.00 and it will take 3.0 hours to trim and prepare the recycled part for installation. The shop labor rate is $42.00 per flat rate hour. Will it be more economical to repair the vehicle with the new or recycled part?
What will be an ideal response?
The recycled part installation will be more economical, at a cost of $926.00 vs. $975.00 for the new part installation.
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