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Not have to do with any hours spent - only book time. Book time will say R&R intake manifold gaskets at 4.3 hours...or whatever the time. If you do it in 2.5 then you beat the book but still charge the 4.3 hours. That's how the auto repair industry works and is regulated that way. If it takes 5.7 hours and you get charged the extra time (because the mechanic was incompetent or broke a bolt and took extra time to repair it...) you don't have to pay for any more hours above the book time.
So it works both ways. Obviously shops try to cram as much in as possible, beat the book time and get the mechanics working on the next job to bring more money in.
Oh yeah, I know aboiut book hours. I have a buddy who works at a Ford specialist collision center and he regularly books 70+ hours per week but rarely works overtime of an evening and only until noon on saturdays!
Even so, at $500-600 that's a heck of a labor charge for a relatively simple job.