Costing Methods

Costing Methods

Costing Methods

This feature from software version 36828, allows you to add special costing methods to formulations. This is particularly useful in the following circumstances:

  1. You use manufacturing methods which increase the cost of a product beyond the cost of the ingredients. In this case you can add a costing group with a fixed cost per formulation.
  2. You are in a volatile market for ingredient prices and want to add an additional percentage cost per formulation. Here you add a Cost Uplift percentage.
  3. You have formulations of variable length and want to include a cost per ingredient, to reflect the manufacturing time. Here you add a Cost per Component.

Using Costing Methods

The first step is to set up your own costing methods, which represent the additional costs per cost group.

Cost Methods options are highlighted below, (you do not need to enter all the options, it depends on your additional costs)

The method below adds 12 to the formulation cost:

Add the costing methods to your appropriate formulations to check they work as you’d expect. Initially, everything is Default:

Modify, select your new cost method and save. You see the effect of the cost when you then view the item:

If this formulation is contained in another formulation, it uses the altered cost, and this is reflected on screen too

When adding a new formulation, you have the option to select a costing method

If you have a product with a yield, which also has a costing method, the cost calculation undertakes effect of yield on the base cost, then adds the effect of costing method. In the following example, base cost = ?22.90. yield 90%, cost method adds ?12, hence 100/90*22.90+12 = ?37.44

You can search in Find Matching Items to find items with particular costing methods:

When you modify a costing method to adjust the factors, the revised cost for affected items is updated when you recalculate costs in Automatic Processing. Or you can calculate costs for individual items if you want to see the effect immediately.

Updated costs after recost shown below:


Last updated April 2020
Prev research
Next research