Within
the Bodyshop 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 Bodyshop as a
whole.
The
trading strategy of your Bodyshop will have an impact upon
the suggested baseline of 45% and will vary according to the level of
insurance work that your
business undertakes.
Example:
A) Total Gross Profit = R107,540 B) Turnover = R165,446 C) Gross Profit % = 65% (A ÷ B X 100)
Discussion:
Financial
reports for the Bodyshop show Gross Profit on Labour Sales before they
show the total Departmental Gross Profit; this page is explaining the
overall Departmental Gross Profit within which Labour Gross profit is
included.
The Gross Profit% of a Bodyshop has a tendency to be lower than that of the Service Department because of lower Recovery Rates and higher Productive Labour costs.