460C Quick Service Labor - Cars & Light Duty Trucks

460C Quick Service Labor – Cars & Light Duty Trucks

461C Quick Service Labor – Commercial, Fleet, & Medium Duty Trucks

Sales

Fixed Operations

Sales Synopsis

Accounts 460C and 461C are established to record Labor sales paid by Customers for Quick Service maintenance performed by the Mechanical Department. Account 460C is for Cars & Light Duty Trucks and Account 461C is for Commercial, Fleet, & Medium Duty Trucks.

Debits

Credits

The selling price of Mechanical Labor sold to customers completed in designated Quick Service bays
The selling price of single line item mechanical labor such as:

a. Lube, oil & Filter (LOF)

b. Tire rotation

c. Routine inspections

660C Quick Service Labor – Cars & Light Duty Trucks

661C Quick Service Labor – Commercial, Fleet, & Medium Duty Trucks

Cost of Sales

Fixed Operations

Cost of Sales Synopsis

Accounts 660C and 661C, respectively, are established to record the Cost of Sales, which is defined as compensation paid to technicians, for customer paid Quick Service Mechanical Labor.

Debits

Credits

Cost of mechanical labor related to Quick Service Labor sales

Example 1

Record customer repair order for a lube, oil & filter in the amount of $30. The quick service labor sale is $10. The shop supplies are $8, the parts sale is $3, the gas, oil and grease sales are $8 and the sales tax is $1. The labor cost is $3. The shop supplies cost is $2, the parts cost is $2 and the gas, oil and grease cost is $6.

Journal: Service Sales - Cash

Entry:		Debit	Credit
Account 225	Cash Sales	$30
Account 660C	Cost of Sales – Quick Service Labor – Cars & Light Duty Trucks	$3
Account 669	Cost of Sales – Shop Supplies	$2
Account 678	Cost of Sales – Parts – Quick Service – Repair Orders	$2
Account 691	Cost of Sales – Gas, Oil & Grease	$6
Account 244	Inventory – Gas, Oil & Grease		$6
Account 242	Inventory – Parts & Accessories		$2
Account 242	Inventory – Parts & Accessories		$2
Account 247A	Inventory – Work in Process – Mechanical		$3
Account 460C	Sales – Quick Service Labor – Cars & Light Duty Trucks		$10
Account 469	Sales – Shop Supplies		$8
Account 478	Sales – Parts – Quick Service – Repair Orders		$3
Account 491	Sales – Gas, Oil & Grease		$8
Account 324	Sales Taxes Payable		$1

Comments

If the dealership has a Quick Service Bay, then all Mechanical Labor performed by the Quick Service Technicians should be recorded in these accounts. When single line item repairs are performed by technicians paid on a lower scale, the mechanical labor should be considered as Quick Service and recorded in these accounts.

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.