Volvo Repair: 94 Volvo Auto Trans quest, volvo 850 wagon, light arrow

Question
I have a 94 Volvo 850 wagon with auto transmission problem.  Sometimes, mostly when it's really cold, I start the car and the low gear light? (arrow light that points up) starts flashing and when I try to put it in gear to drive, it is stuck in a low gear and takes a lot of gas to get it to move an inch. So I don't drive it that day, but the next day it is just fine.  This happens about once a month (I think it does it most when it is really cold out or when I haven't driven it for a long time).  The mechanic told me that it is some type of automatic transmission controller thing (I'm a mechanical idiot) and that it will cost $1200.00 to fix and he could do it in an hour.  As an expert, does this sound like the right price?  Or, is there other possibilites I should look at?

Answer
Could be it but I would be unsure of the price.  Its a big cost so I would get a second opinion if it doesn;t cost you anything more.  Unless it was a volvo shop that gave you that diagnosis I would go to a dealer or volvo specific shop.  He's probably quoting you a price on either the transmission controller (the transmission computer) or a control system (valve body and solenoids inside the transmission).  The up arrow means that there is a fault in the transmission that the computer sees.  So he's giving you the price to fix a fault, or the price to fix a misreading computer.  Hope that helps.

James