Question

Shop A charges $275.00 for an oil change and has a gross oil profit percent of 39.1% for its total oil gross profit %. Shop B charges $275.00 for an oil change and has a gross oil profit percent of 28.4% for its total oil gross profit %. Both shops pay $21.25 per gallon of oil. What is the Profit per Lube for Shop A? ​

Answer 1

The profit per Lube for Shop A is $8.31.

What is the profit per unit?

The profit per unit can be obtained by subtracting the cost of the product from the sale price.

Data and Calculations:

Sales price per oil change = $275

Gross profit percent per oil = 39.1%

Cost of oil per gallon = $21.25

Selling price per gallon = $29.56 ($21.25 x 1.391)

Gross profit = $8.31 ($29.56 - $21.25)

Thus, the profit per Lube for Shop A is $8.31.

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