Within the Service Department there are two levels of Gross Profit that are measured; be sure that you are measuring the results that you really want.
The basic concept of Gross Profit is simply sale less cost of sale, therefore the following example relates to the service department as a whole.
The trading strategy of your Service Department will have an impact upon the suggested baseline of 65% and will vary according to the level of discount that you give, Sub Contract work and oil sales that your business conducts.
Example:
A) Total Gross Profit = R107,540 B) Turnover = R165,446 C) Gross Profit % = 65% (A ÷ B X 100)
Discussion:
Financial reports for the service Department show Labour Gross profit before they show the total Departmental Gross Profit; this page is explaining the overall Departmental Gross Profit within which Labour Gross profit is included.