1. The mechanic started at 8:25 am and finished at 4:23 pm. This is a total of 7 hours and 58 minutes of work (4:23 pm - 8:25 am).
2. The mechanic also took one hour off for lunch, so we subtract that hour from the total hours worked: 7 hours and 58 minutes - 1 hour = 6 hours and 58 minutes of work.
3. Convert the minutes to decimal form for calculation. There are 60 minutes in an hour, so 58 minutes is 58/60 = 0.967 hours.
4. Add the decimal minutes to the total hours: 6 hours + 0.967 hours = 6.967 hours.
5. Now, multiply the total hours worked by the hourly rate: 6.967 hours * $18.75/hour = $130.83.
So, the mechanic earned $130.83 for the overhaul of the transmission.