by jazdale » Fri Oct 25, 2002 5:27 pm
Gerry,
Explanation of my 'drift'
If you worked at Dale Motors, the service department would report the the gross from labor sales, and the parts department would report the gross from parts sold on the RO.
Since the premium paid for getting the part from down-the-road motors is a cost to parts, it doesn't matter where it shows up, the bottom line is still the same for the parts department. Using your example, the whole 33.50 becomes parts profit.
For whatever reason(s) the manufacturer implemented the gross parts transfer, a portion of parts gross became service gross. But the expenses in acquiring these parts did not. I'm not sure, but I don't believe the 687 account is part of the gross transfer. A point that totally confirms your first post on only making 8.50 while the service dept gets 25.00.
Additionally, many commission schemes are not factoring in these costs.
I guess my point is - since the manufacturer is forcing creative accounting on you, then you are forced to do your own version of creative accounting to show a profit.
***************************
Your example of the Alero handle.
Totally throws my penalty statement out the window (no pun intended).
But, of course - if we didn't give a portion of parts gross to the service dept, we wouldn't have this dicussion in the first place.
Thanks for your insight
Dale