The Manager of Hudson Auto Repair Wants to Advertise One

question 76

Short Answer

The manager of Hudson Auto Repair wants to advertise one price for an engine tune-up, with parts included. Before he decides the price to advertise, he needs a good estimate of the average cost of tune-up parts. A sample of 20 customer invoices for tune-ups has been taken and the costs of parts, rounded to the nearest dollar, are listed below.
Provide a 90% confidence interval estimate of the mean cost of parts per tune-up for all of the tune-ups performed at Hudson Auto Repair.

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Definitions:

Margin of Safety

The difference between actual sales and the break-even point, indicating how much sales can fall before a business incurs a loss.

Fixed Expenses

Costs that do not vary with the level of production or sales, remaining constant over a period of time.

Variable Expenses

Charges that adjust directly with the volume of production or sales, encompassing costs related to raw materials and direct labor.

Fixed Expenses

Costs that do not change with the level of production or sales within a certain range and for a specific period.