Costing and Pricing Repairs – JSS3 Computer Hardware & GSM Repair Lesson Note (Second Term)

Class: JSS 3 | Subject: Computer Hardware and GSM Repair

Costing and pricing means working out what a repair costs you and then deciding how much to charge the customer.

Behavioural objectives

By the end of the lesson, students should be able to:

1. Differentiate between cost and price.
2. Calculate profit from a given cost and price.
3. State the factors that determine a service charge.
4. List the hidden costs in a repair business.
5. Prepare a simple estimate for a customer.

What is the difference between cost and price?

Cost is the money you spend, while price is the money the customer pays you.

What is cost?

• Cost: the total amount of money you spend to get a job done.
• Example: a customer brings a laptop with a broken keyboard and you buy a new keyboard for ₦8,000. Your cost is ₦8,000.

What is price?

• Price: the total amount you collect from the customer.
• Example: you tell the customer to pay ₦12,000. That is your price.

What is profit?

Profit is the money left after you subtract the cost from the price.

• Formula: Profit = Price – Cost.
• Worked example: Price (₦12,000) – Cost (₦8,000) = Profit (₦4,000).
• Warning: if you calculate costs wrongly, you may work for free or lose your own money.

What is a service charge?

A service charge (also called a labour fee) is the money you charge for your time, your skill and the use of your tools.

• Charge a service fee even when you buy no new part.
• You still used your skill and your expensive tools to find the problem.

What determines a service charge?

Four things determine a service charge: complexity, time spent, risk and location.

1. Complexity: an easy job like installing an app costs less than a hard job like soldering a tiny chip.
2. Time spent: a job that takes 5 hours should cost more than a job that takes 10 minutes.
3. Risk: opening a very expensive phone such as an iPhone 15 is risky. If the screen breaks, you are responsible, so the charge is higher.
4. Location: repairs in a big city like Lagos or Abuja may cost more than in a small village because shop rent is higher.

What are hidden costs?

Hidden costs are small expenses that are easy to forget but add up over time.

• Electricity: power to run your soldering iron and your test computer.
• Consumables: things that finish as you use them, such as solder wire, flux and cleaning alcohol (IPA).
• Transport: money spent going to the market to buy the spare part.
• Data: megabytes used to download a software driver or watch a “how-to” video for a specific model.

• Many young business owners fail because they forget these costs.

What is the technician’s rule of thumb?

The rule of thumb is to add a small amount, about 5% to 10%, to your price to cover hidden costs.

• It stops you going broke on small items like glue and tape.
• Example: a repair priced at ₦18,000 with 5% added gives ₦18,000 + ₦900 = ₦18,900.

What is an estimate?

An estimate (or quote) is the price you tell a customer before you start the work.

How do you give an estimate?

Follow these four steps to give a fair price.

1. Diagnose first: never give a price until you have seen the gadget. A “dead battery” may be a dead motherboard.
2. Research the part: call your suppliers or check online for the current price of the part.
3. Add your service charge: decide what your time is worth for that job.
4. Communicate clearly: tell the customer, “The screen is ₦15,000 and my workmanship is ₦3,000. Total is ₦18,000.”

What is a warranty?

A warranty is a promise to repair the fault again free of charge if it returns within an agreed time.

• Example: “If it stops working in 2 weeks, bring it back for free.”
• A fair price lets you offer a warranty.
• Customers gladly pay a little more to a technician they can trust.

Evaluation

1. Define “profit” in your own words.
2. Why should a technician charge for service even if no parts were replaced?
3. List three hidden costs in a repair business.
4. A phone charging port costs ₦500 and you spend ₦200 on transport to buy it. What is your total cost before you add your service fee?

Assignment

A customer brings a phone with a broken screen. The screen costs ₦10,000 and transport to the market costs ₦500. Your service charge is ₦2,000. Write out the estimate you would give the customer, then calculate your profit if the hidden costs are ₦500.