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

 

  1. Selling price of mechanical labor sold to customers

  2. Revenue from sources such as towing, battery-charge services and washes in connection with mechanical repairs

 


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

  1. Cost of mechanical labor sold to customers

 

 

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.