Parts—Warranty & Policy Claims—Service

• ACCOUNT EXPLANATION
• TRANSACTIONS
• COMMENTS

Sales: Selling price at authorized reimbursement rates of parts used in connection with work performed in the service department under the Ford Motor Company warranty and policy program.

Cost of Sales: Inventory value of above parts sold.

NOTE: Dealers with competitive franchise (Non FoMoCo) separate parts and report FoMoCo (franchise) parts in Account 5460/6460 and Non FoMoCo (other franchises) in Account 5461/6461. (QL/FL/QCSC) Parts in Account 5462/6462.

*Refer to Chart of Accounts for current applicable Sales/Cost of Sales account numbers

• It is recommended that parts sales be costed on an item-by-item basis at the time of sale, since this method produces the most accurate cost of sales data and provides the best control of inventory. If parts sales are costed on the basis of estimated percentages of retail selling prices in various inventory categories at month end, percentages used should be verified by test checks of actual item costs over a 30-60- day period every six months. Office Management contains additional information on costing methods.
• For explanation of warranty and policy adjustments, forms, procedures, and reimbursement rates, consult the current Warranty & Policy Manual.
• Expenses related to parts involved in price adjustments made to customers and in replacement of defective parts that are the dealership’s responsibility should be charged to Account 7650, Policy Adjustments—Parts.