500 – Customer Labor

Body Shop Department

Sales Synopsis

Account 500

700 – Customer Labor

Body Shop Department

Cost of Sales Synopsis

Account 700

Remarks:

These accounts should be used only by retailers having their own body and paint operation.

The balances in these accounts represent productive body and paint labor on all completed repair orders.  All incomplete body and paint 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 charged to Paint, Material & Miscellaneous (Account 507).

When body and paint employees are employed on a salary, hourly, or guaranteed basis, any amount paid in excess of their actual productive earnings should be charged to Adjustment Cost of Labor Sales (Account 657B).

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.).