Amount paid to Mechanical Service and Body Service technicians which has not been accounted for as productive labor on repair orders, earned vacation time, or charged as building or equipment maintenance. Might represent idle or lost time not properly accounted but usually indicates other problems or irregularities. Computed by subtracting the end-of-month Work in Process-Labor physical inventory from end-of-month Work in Process Labor book inventory. Also called “Adjustment-Cost of Labor Sales”. Displayed on Operating Statement as an increase in cost of sale, decrease of Gross Profit and no sales. If computations produce an increase of Gross Profit, there is still cause for concern.
Synonyms:
Adjustment - Cost Of Labor Sales