DealersEdge Professional Forums

Using Ford accounting, is gross profit the sale amount of labor minus the tech pay? For some reason I thought there was something else - unapplied time? Also, after gross, isnt there departmental expenses, then dealership fixed expenses?

Ford's Financial statement lists each sale type's sale a gross amount ... gross is flat out the cost of tech as shown on the repair order.

As far as the structure of expense, w start with gross and then the following departmental selling expenses are removed:
COMPENSATION - MANAGERS
COMM. & INCENT. (ADVISORS)
SAL - OTHER
ADVERTISING/PROMOTION
TRAINING
POLICY ADJ.
SERV-LOANER
TOOLS AND SUPPLIES
FREIGHT
EQ. & VEH. MAINT.
INV. CNTL. & DATA PROC.
VACATION & TIME
OFF PAY - TECH

These added together give you the total sales expense, when subtracted from the gross profit, it give us the selling gross. The fixed expenses are totalled and subtracted from the selling gross and gives us the operating profit.

So you gross profit, then selling gross profit, then after fixed expenses are removed, operating profit. For a parts and service director, gross and selling gross seem to be what they would have the most control over. Which means, better to be paid on gross and selling gross than to be paid on operating profit?

Sure if you find a dealer willing to give you that deal - selling gross is the best departmental management view.