450B – Other – Customer Labor

Service Department

 

Sales Synopsis

Account 450B

Debits

Credits

 

  1. The actual selling price of all OTHER labor, including extended service contract plans, sold to customers on completed repair orders for Retailers that sell and report on their Financial Statement other New Vehicle Makes.

650B – Other – Customer Labor

Service Department

 

Cost of Sales Synopsis

Account 650B

Debits

Credits

  1. The cost of all OTHER labor sold to customers, including extended service contract plans IF the Retailer also sells and reports on their Financial Statement other New Vehicle Brands in addition to Subaru.  Otherwise, "Other" Service & Parts Sales accounts should not be used by exclusive Subaru Retailers.

 

 

Remarks:

The balances in these accounts represent productive mechanical labor on completed customer repair orders involving non-Subaru vehicles, only if the Retailer also sells and reports Other Makes on their Financial Statement, otherwise Exclusive Subaru Retailers should use the Subaru reporting accounts for all Service and Parts activity.  

 

All incomplete repair orders are work-in-process and should be handled as outlined in Work in Process – Labor (Account 247).

 

Labor sales and costing procedures should be reviewed periodically to determine if the maximum profit potential is being realized.

 

Charges made on the repair order for separate items, such as miscellaneous shop supplies, should be included in the gross labor sales price and reported in this sales account for accounting purposes.  Such items should not be considered as offsetting credits to expense or as other income unless required by law.

 

When technicians are employed on a salary, hourly, or guaranteed basis, the amount paid in excess of their actual productive earnings should be charged to Adjustment Cost of Labor Sales (Account 657A).

 

When an employee's time is divided, (such as a working shop foreman who spends part of his time in a supervisory capacity and the remainder in performing productive labor; or a porter who spends part of his time in a productive capacity such as washing cars or new car clean-up, and the remainder performing utility jobs) the salaries and/ or wages paid should be appropriately divided between the cost of sales account and the applicable expense account.

 

Customer repair orders should state specifically the operations to be performed and should be signed by the customer.  Each customer repair order should indicate the type of vehicle serviced (passenger car, commercial vehicle, etc.).

 

All work performed by the Service Department should be authorized and recorded on repair orders.