464 New Vehicle Inspection Labor

Sales

Fixed Operations

Sales Synopsis

Account 464 is established to record the Labor Sales required to perform new vehicle preparation by the Mechanical Department.

Debits

Credits

 

  1. Actual selling price (warranty rate times the time allowed on the specific vehicle) of labor performed in conditioning new vehicles per factory specifications

 

664 New Vehicle Inspection Labor

Cost of Sales

Fixed Operations

Cost of Sales Synopsis

Account 664 is established to record the Cost of Sales, which is defined as compensation paid to technicians, for Labor related to New Vehicle preparation.

Debits

Credits

  1. Cost of mechanical labor performed in conditioning new vehicles per factory specifications

 

 

Example 1

Record a repair order for new vehicle inspection in the amount of $107.  The labor cost is $19.

Journal: Internal Sales

Entry:

 

Debit

Credit

Account 261

Factory Receivables

$107

 

Account 664

Cost of Sales – New Vehicle Inspection Labor

$19

 

Account 464

Sales – New Vehicle Inspection Labor

 

$107

Account 247A

Inventory – Work in Process – Mechanical

 

$19