Costing — How the New SKU Gets Its Cost
The cost of Sugbo Blend 70g is the sum of:
- Material cost — the consumed Blu Espresso Blend 500g + the 70g coffee pouch
- Labor + overhead — the time spent on grinding and packaging at their work-center rates
Cost rollup formula
For one finished unit of Sugbo Blend 70g:
unit_cost = (espresso_cost_per_kg × 0.075)
+ (pouch_70g_cost × 1)
+ (grinding_cost_per_hour × grinding_minutes / 60)
+ (packaging_cost_per_hour × packaging_minutes / 60)
With placeholder numbers:
| Term | Value |
|---|---|
| Espresso cost / kg | ₱400 (illustrative — actual = 500g pack landed cost ÷ 0.5) |
| Espresso consumed | 0.075 kg |
| Material from espresso | ₱400 × 0.075 = ₱30.00 |
| Coffee Pouch 70g | ₱2.50 |
| Grinding rate | ₱600/hr (labor ₱200 + electricity ₱150 + equipment ₱250) |
| Grinding time | 2 min |
| Grinding cost | ₱600 × 2/60 = ₱20.00 |
| Packaging rate | ₱180/hr (labor only) |
| Packaging time | 1 min |
| Packaging cost | ₱180 × 1/60 = ₱3.00 |
| Standard cost | ₱55.50 |
| SRP | ₱105 |
| Gross margin | (105 − 55.50) / 105 = 47.1% |
These figures are illustrative — see Open Questions for the data VGC needs to provide.
Costing method choice — Standard vs Average
| Aspect | Standard Cost | Average Cost |
|---|---|---|
| Cost stability on the product | Stable until manually re-costed | Drifts with each MO |
| Variance visibility | Captured per MO (MO actual − BOM standard) | None |
| Re-costing burden | Quarterly review needed | Automatic |
| Reporting clarity | Easy to spot drift | Harder to attribute changes |
Recommendation: Standard cost. It surfaces variance — if the espresso pack price jumps 10%, the variance shows up immediately on the MO and on the Manufacturing Cost Analysis report. With average cost, the change silently absorbs into the product cost.
Anglo-Saxon accounting setup
Confirm on the Finished Goods / Coffee product category:
| Field | Account |
|---|---|
| Stock Input Account | (e.g.) 120201 INVENTORY — STOCK IN |
| Stock Output Account | 120202 INVENTORY — STOCK OUT |
| Stock Valuation Account | 120100 INVENTORY — FINISHED GOODS |
| Income Account | 410101 SALES — COFFEE |
| Expense Account (COGS) | 510101 COST OF SALES — COFFEE |
Account codes above are placeholders — verify against the actual VGC chart of accounts (extended in blu_account).
Analytic accounts for work centers
To trace labor / electricity / equipment costs into the P&L by department:
| Analytic Account | Used By |
|---|---|
Roastery — Labor | Both work centers (filtered by employee timesheets if active) |
Roastery — Electricity | Grinding work center |
Roastery — Equipment Dep. | Grinding work center |
Tag work-center journal entries with these analytic accounts so the Roastery P&L view shows labor vs electricity vs depreciation separately.
Production variance account
When a Manufacturing Order closes, Odoo posts the difference between standard cost and actual cost to a configurable account. Use a dedicated:
| Account | Purpose |
|---|---|
590101 PRODUCTION VARIANCE — COFFEE | Catches price/qty drift between BOM standard and MO actuals |
This account should be reviewed monthly. Persistent debit balances mean the BOM standard cost is too low and needs updating.
Reporting
The planned Phase 4 work in blu_reports adds:
- Manufacturing Cost Analysis — per-MO standard vs actual, broken down by material / labor / overhead, filterable by brand and date range
- Yield/Loss Report — kg in vs kg out per BOM, flags grinding-loss outliers
- Roastery WIP Aging — items sitting in
Roastery / Raw Materialsfor more than N days
These will live under the existing Blu Reports > Operations menu (consistent with the sub-distributor menu placement from commit 3876607).