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The profits on the repairs should be calculated against the wholesale price because doesn't give the used car sales manager a perverse incentive to sell unrepaired cars or cars without profitable options for fear of hurting their margins.
The loss on the car is $1,800. I think $1,300 of the loss should be negative credit on the new car salesman, while the remaining $500 should be a negative credit for the used car salesman.
The problem is that in order to sell new cars, the salesmen are offering unrealistic trade-in-values for cars. The cars are not really worth the value, and the used salesmen suffer by having to sell the car below the trade-in-value...
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