460A Customer Labor – Cars & Light Duty Trucks
461A Customer Labor – Commercial, Fleet, &
Medium Duty Trucks
460E Customer Labor EV - Cars & Light Duty Trucks
461E Customer Labor EV - Commercial, Fleet & Medium Duty Trucks
Sales
Fixed Operations
Sales Synopsis
Account 460A, Cars & Light Duty Trucks, and Account 461A, Commercial, Fleet & Medium Duty Trucks, are established to record Mechanical Labor sales paid directly by customers for repairs on ICE vehicles performed by the Mechanical Department.
Account 460E, EV Cars & Light Duty Trucks, and Account 461E, EV Commercial, Fleet & Medium Duty Trucks, are established to record Mechanical Labor sales paid directly by customers for repairs on Electric vehicles performed by the Mechanical Department.
Debits |
Credits |
|
|
660A Customer Labor – Cars & Light Duty Trucks
661A Customer Labor – Commercial, Fleet, &
Medium Duty Trucks
660E Customer Labor EV - Cars & Light Duty Trucks
661E Customer Labor EV - Commercial, Fleet & Medium Duty Trucks
Cost of Sales
Fixed Operations
Cost of Sales Synopsis
Accounts 660A and 661A, respectively, are established to record the Cost of Sales, which is defined as compensation paid to technicians, for customer paid Mechanical Labor.
Accounts 660E and 661E, respectively, are established to record the Cost of Sales, which is defined as compensation paid to technicians, for customer paid Mechanical Labor on Electric vehicles.
Debits |
Credits |
|
|
Example 1
Record a customer cash sale of $618 for mechanical labor and parts on an ICE Light Truck. The customer labor is $340. The part sale is $250. The sales tax is $13 and the shop supplies are $15. The cost of the labor is $100. The parts cost is $80 and the cost of the shop supplies is $10.
Journal: Service Sales - Cash
Entry: |
|
Debit |
Credit |
Account 225 |
Cash Sales Clearing |
$618 |
|
Account 660E |
Cost of Sales – Customer Labor – Cars & Light Trucks |
$100 |
|
Account 667 |
Cost of Sales – Parts Mechanical Repair Orders & Light Duty Trucks |
$80 |
|
Account 669 |
Cost of Sales – Shop Supplies |
$10 |
|
Account 242 |
Inventory – Parts & Accessories |
|
$80 |
Account 242 |
Inventory – Parts & Accessories |
|
$10 |
Account 247A |
Inventory – Work in Process - Mechanical |
|
$100 |
Account 324 |
Sales Taxes Payable |
|
$13 |
Account 460A |
Sales – Customer Labor – Cars & Light Duty Trucks |
|
$340 |
Account 467 |
Sales – Parts Mechanical Repair Orders & Light Duty Trucks |
|
$250 |
Account 469 |
Sales - Shop Supplies |
|
$15 |
Example 2
Record a customer cash sale of $1,326 for mechanical labor and parts on an EV Car. The customer labor is $500. The parts sale is $750. The sales tax is $38 and the shop supplies are $38. The cost of the labor is $125. The parts cost is $500 and the cost of the shop supplies is $28.
Journal: Service Sales - Cash
Entry: |
|
Debit |
Credit |
Account 225 |
Cash Sales Clearing |
$1,326 |
|
Account 660E |
Cost of Sales – Customer Labor – EV Cars & Light Duty Trucks |
$125 |
|
Account 667E |
Cost of Sales – Parts Mechanical Repair Orders EV Cars & Light Duty Trucks |
$500 |
|
Account 669 |
Cost of Sales – Shop Supplies |
$28 |
|
Account 242 |
Inventory – Parts & Accessories |
|
$500 |
Account 242 |
Inventory – Parts & Accessories |
|
$28 |
Account 247A |
Inventory – Work in Process – Mechanical |
|
$125 |
Account 324 |
Sales Taxes Payable |
|
$38 |
Account 460E |
Sales – Customer Labor – EV Cars & Light Duty Trucks |
|
$500 |
Account 467E |
Sales – Parts Mechanical Repair Orders EV Cars & Light Duty Trucks |
|
$750 |
Account 469 |
Sales – Shop Supplies |
|
$38 |
Note:
It is recommended that whenever practicable labor sales be costed on actual basis because material losses of productive time may be concealed by the inaccuracies inherent in percentage costing methods. Such inaccuracies can result from failure to update costing percentages when changes occur in the compensation of technicians and in the structural of selling prices of labor, and other reasons.
Assure that Repair Order templates and accounting are set up correctly by the DSP and maintained whenever technicians have payroll changes. Technician incentives or bonuses should be considered cost of labor sales and debited to A/C 665 and 675 as applicable. However, holiday, vacation, and sick pay should not be charged to Cost of Labor Sales, but as a non-productive wage expense in A/C 24 - Absentee Compensation.
Before closing each month, assure that the balance in A/C 247 - Work in Process, matches the total cost of labor on open (unclosed) R.O.'s, any difference should be adjusted to A/C 665 or 675 - Labor Adjustment.