Several days ago you took your TV set into a shop to have some repair work done. When you later picked up the set, the bill showed a $75 charge for labor. This charge represented two hour of service time-$30 for the first hour and $45 for the second.
When questioned about the difference in hourly rates, the shop manager explained that work on your set was started at 4 o’clock in the afternoon. By the time work was completed two hours later at 6 o’clock, an hour of overtime had been put in by the repair technician. The second hour therefore contained a charge for an “overtime premium” because the company had to pay the repair technician time and a half for any work in excess of eight hours per day. The shop manager further explained that the shop was working overtime to “catch up a little” on its backlog of repairs, but it still needed to maintain a “decent” profit margin on the technician’s time.
1. Do you agree with the shop’s computation of the service charge on your job?