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Study Notes

The flat-rate system charges customers a predetermined number of hours for a repair, ensuring all customers pay the same price for the same repair.
The flat-rate system allows for accurate and consistent estimates before work is started.
Flat rate guarantees consistency in technician pay and rewards highly skilled and motivated technicians.
The flat-rate system was developed more than seventy years ago in response to a depleted technical workforce in the United States during World War II.
Flat-rate manuals are used to establish labor charges based on a comprehensive listing of labor times for performing common repairs.
There are two methods used to establish the times published in flat-rate manuals: live time study and national surveys.
Very few shops use the hourly rate method to establish charges for common or competitive repairs.
A pricing system that has gained increasing favor over recent years is the variable rate pricing system.
In a shop using a variable rate system, the hourly labor rate charged for a repair depends on the type of repair and the difficulty of that repair.
A shop using variable rate pricing will normally price basic maintenance and repair services at its lowest hourly rate, and very complex repairs that require specially trained technicians, special equipment, or proprietary technical information at a much higher hourly rate.- Pricing repair work depends on the complexity of the repair and the labor rates used by the shop.
Technician pay methods can differ from customer labor price calculation methods.
Four common methods of paying technicians are flat rate, flat rate with a guarantee, hourly, and hourly plus a performance bonus.
Technicians are categorized into levels based on their experience, productivity, and ability to produce quality repairs.
The highest-paid technicians are highly experienced, capable, productive, and produce great quality repairs.
A secondary group of experienced technicians is not quite at the level of the highest-paid technicians.
The third group of technicians is only able to perform basic repairs.
The mix of technicians with different skill levels depends on the company's needs.
The cost of labor increases as the skill level of the technician rises.
Management's job is to control costs while maintaining high productivity and quality.

Description

Test your knowledge on the pricing and payment systems used in the automotive repair industry with this informative quiz. Learn about the flat-rate system, variable rate pricing, and technician pay methods. Discover how technicians are categorized based on their experience and productivity, and how management controls costs while maintaining quality. This quiz will help you understand the inner workings of the automotive repair industry and the factors that determine the cost of repairs.