Suppose that the cost of hiring your mechanic (including the cost of parts) is $

Question

Suppose that the cost of hiring your mechanic (including the cost of parts) is $200 an hour up to four hours and $300 an hour over four hours (she charges for her time in one-hour increments). Your benefits and other costs are shown below. Fill in the blanks in the table below.

Instructions: Round your answers to the nearest whole number.

Your best choice is to hire your mechanic for ___ hours.

Hours Total
Benefit Repair
Cost Lost Earnings from
Pizza Delivery Job Total
Cost Net
Benefit 0     $0 $0   $0 $0 $0 1    615   10 2 1,150   25 3 1,600   45 4 1,975   75 5 2,270 110 6 2,485 150

Explanation / Answer

Answer : Given, per hour mechanic cost $200 for 4 hours and after 4 hours $300 per hour .

Repair cost = number of hours * per hour mechanic cost

Total cost = Repair cost + Lost earnings

Net Benefit = Total Benefit - Total Cost

Based on above table calculation I get the highest net benefit $1,100 at 4 hours. As I am getting highest net benefit at 4 hours, hence I will choose to hire mechanic for 4 hours.

Hours Total
Benefit Repair
Cost Lost Earnings from
Pizza Delivery Job Total
Cost Net
Benefit 0     $0 $0   $0 $0 $0 1    615 200   10 210 405 2 1,150 400   25 425 725 3 1,600 600   45 645 955 4 1,975 800   75 875 1,100 5 2,270 1,500 110 1,610 660 6 2,485 1,800 150 1,950 535

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