Troubleshooting manufacture costs
How to troubleshoot issues with your manufacture material costs
Having trouble with your manufactures not costing correctly? Here's a few things you can try to get your manufactures costing successfully.
In this article:
- How manufactures are costed
- Manufacture has a zero material cost
- Manufacture has a lower than expected cost
- Manufacture has a higher than expected cost
How manufactures are costed
It's important to note that manufacture material costs are calculated using the unit cost of all included materials on the exact date of manufacture.
Craftybase uses a rolling (moving) average for all inventory adjustments up to the manufacture date.
My manufacture has a zero material cost
Manufactures will be costed as zero for two reasons:
1) Your materials used in the manufacture were out of stock on the manufacture date, or
2) Your material costs have been calculated from your adjustments as zero on the manufacture date.
To rectify this review your inventory history for each of the materials in your manufacture to find the cause of the zero value. Fixing the discrepancy will automatically update the manufacture as all costs will be recalculated.
1. Error with a previous purchase price. In the example below, the purchase before the manufacture has a unit price of 0.00. This has resulted in the manufacture on the 30 Nov to also have a unit price of 0.00 as it is using up the zero valued stock added on 14 Oct.
2. Material out of stock: In the example below, the manufacture on the 30 November uses up all stock purchased on the 29 Mar. As there is now no stock available, the Manufacture on the 1 Dec cannot have a unit cost calculated and is thus 0.00. To fix, the missing material stock needs to be added in as either a purchase or part of the starting adjustment so that the 1 Dec has enough stock to have a cost calculated.
Manufacture has a lower than expected cost
This case usually occurs if stock has been brought forward via a starting adjustment with a 0.00 unit cost, or alternatively if a manual adjustment has been added for the material to increase stock.
You may firstly wish to review your uncosted adjustments to ensure that this is the correct way of bringing your stock into your inventory. In both cases, your material unit cost will be diluted due to the zero costed stock.
When this zero costed stock has been fully consumed, you should see your manufacture costs start to rise back to their expected amounts.
Manufacture has a higher than expected cost
This case usually occurs if there is an issue with either an initial material starting adjustment, or a material purchase has been entered in incorrectly.
You'll want to check that for your starting adjustment that your unit cost represents a single unit of the material (i.e. not the total of all materials).