Workbench Labour Journal
The following is the recommended treatment of the workbench Labour Journal.
Division 1 Division 2 Division 3
Sales
Less Cost of Sales
Labour (WB Journal)135315300
Plant
Materials
Gross Profit
Overheads
Wages (from payroll)100200300
Labour Recovered (WB Journal)(90)(210)(200)
Net (Over)/Under Recovery 10( 10) 100
Other Expenses
Rent
Rates
Power etc
Total Overheads50100150
Overheads Recovered (WB Journal)(45)(105) (100)
Net (Over)/Under Recovery 5 ( 5) 50
Net Profit
The Labour Journal accounting entries are:
Debit – Job Profit Centre and Activity Code GL
Credit – Employee Profit Centre and Employee Class GL.
Recovery rates should be determined by dividing total budget cost by the expected number of hours to be charged to projects. The theory therefore is that if you worked the required number of hours all wage and overhead costs would be transferred to Cost of Sales. The Net (Over)/Under Recovery is therefore a combination of rate variance and utilization. By comparing Chargeable Hrs in Workbench with total Paid Hours from payroll you can quickly see if you are recovering more or less hours than budgeted in your recovery rate calculation, the balance will be a rate variance which should not be significant.
General
Content
Integrations