This information simply informs you of the balance between your Service Department's sales of hours.
In most cases the Service Department is split into three distinct categories of income, which are Retail, Internal, and Warranty. For many franchises it is generally accepted that the Labour Sales Mix is:
Retail hours sold 70% Warranty hours sold 10% Internal hours sold 20% Total Hours sold 100%
It is always wise to measure your Labour Sales Mix in terms Hours Sold as opposed to the monetary value of Labour Sales because Recovery Rates vary across each income sector as do the charge out rates.
Example:
Discussion:
All of these price differences lead to inconsistency when measuring the trend and direction of your Service Department and it is therefore more meaningful to measure the Hours Sold into each income sector.
All of the price differences and distortions are eradicated when only the Hours Sold are analysed.