ACE Auto Repair developed a new diagnostic testing procedure that is expected to

Question

ACE Auto Repair developed a new diagnostic testing procedure that is expected to increase sales by $10,000 per month. As more drivers bring in their vehicles, ACE expects to also do more oil changes and brake repairs. As a result, inventory levels of oil and brake parts must be increased by $5,000. Revenues from oil changes and brake jobs are expected to increase by $4,000 per month. An example of a synergistic effect from the new diagnostic testing procedure is the:

A. increase in inventory levels of oil and brake parts.

B. increase in revenue of $10,000 per month for the diagnostic testing.

C. increase in revenues from oil changes and brake jobs of $4,000 per month.

D. increase in all activities totaling $19,000 per month.

Explanation / Answer

C. increase in revenues from oil changes and brake jobs of $4,000 per month.

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