October 30, 2016 admin

Unapplied Time—Service

Sales and Cost of Sales

UNAPPLIED TIME—SERVICE COST OF SALES ACCOUNT
6740/6741

ACCOUNT EXPLANATION

Technicians’ wages not applied in costing sales of customer or internal labor.

*Refer to Chart of Accounts for current applicable Sales/Cost of Sales account numbers
TRANSACTIONS
  Jrnl. Dr. Cr.
  Unearned guarantee portion of wages paid to technicians PR
    Unapplied Time—Service/QL/FL/QCSC 6740,
6741
      Accrued Payroll 2410
             
  Adjustment to reduce the labor in process inventory to agree with schedule of cost of labor in uncompleted repair orders SE
    Unapplied Time—Service/QL/FL/QCSC 6740,
6741
      Inventory—Labor in Process 1440
COMMENTS
  • A debit balance in this account will usually represent the unearned guarantee portion of wages paid to technicians for which no service was performed. Any amounts charged to this account other than the unearned guarantee should be analyzed to determine whether caused by inefficient utilization of technicians, low technician productivity or inaccurate costing practices. Appropriate corrective action should be taken to eliminate the cause.
  • Absentee, vacation, and holiday pay should not be charged to this account.