Production
Track manufacturing costs — materials, labour, overhead — for true cost per unit.
Production tracks the full cost of manufacturing. It does not assume that finished goods cost only what the raw materials cost. Every production batch captures materials consumed, labour applied, and overhead absorbed — combining them into a true cost per unit that becomes the cost of the finished goods.
The Productions Page
Navigate to: Operations → Productions
The Productions page is divided into three tabs.
| Tab | What It Shows | Actions Available |
|---|---|---|
| Batches | Individual production runs — Batch No, Title, Date, Output Qty, Total Cost, Cost/Unit, Status — with Finalized and Draft summary cards. | New batch, search, export, open a batch to edit, finalize or unfinalize |
| Cost Cards | The recipes — Name, Total Cost, Output Cost/Unit, Materials count, Outputs count. | New cost card, open, edit, duplicate, delete |
| Materials | The Material-type items available as inputs, with their stock and cost. | View; open an item |
Cost Cards
A Cost Card is the master recipe for a product. It defines what the system expects to consume and produce for one standard production run. Actual quantities can differ from the card — the batch captures what actually happened.
Cost Card Sections
| Section | What It Defines | Required? |
|---|---|---|
| Basic Info | Name, Allocation Method (By Sales Value, By Weight, Manual %), and an optional description | Name: yes |
| Materials | Material items consumed per batch with quantity and cost; the stock on hand shows under each pick | Yes (at least one) |
| Labour | Expense items with hours × rate | No |
| Overhead | Variable, Fixed, or Depreciation lines with an absorption driver, source and rate | No |
| Output Products | All items produced: Main, Co-Product, By-Product, and Waste lines with quantity and sell price | Yes (at least one Main or Co-Product) |
Creating a Cost Card
Click New Cost Card on the Cost Cards tab. Fill in the Basic Info (name, allocation method, description), then add sections:
Materials: Add each raw material line with the item and expected quantity per batch. The cost defaults to the item's current cost and the line amount updates as you type.
Labour: Add labour lines. Each line is an expense item with hours and a rate.
Overhead: Add overhead lines. Each line has an expense (or asset for Depreciation), a type, a driver, a source, an amount, a base and the resulting rate.
Output Products: Add each output item. At least one Main (or Co-Product) line is required. Additional outputs can be Co-Products, By-Products, or Waste.
The Summary panel shows Materials, Labour, Fixed OH, Depreciation, Joint Cost and Total Production Cost as you build the card.
Production Batches
A production batch is a single execution of a cost card. It records what actually happened — the actual materials used, actual labour time, actual overhead — and produces the journal that transfers costs from inputs to finished goods.
Batch Fields
| Field | Required? | Details |
|---|---|---|
| Cost Card | Yes | The cost card this batch follows. Selecting it pre-fills the lines — these are editable to reflect actuals. |
| Date | Yes | The date production occurred. This is the finalization journal's business date. |
| Batch # | Auto | Auto-generated (PRD000001 …) unless you switch to manual and type your own. |
| Center | No | The production unit (factory, kitchen, workshop) where the batch runs. |
| Allocation | Locked | Inherited from the cost card. |
| Reference | No | A customer order, quality batch code, or shift reference. |
| Materials | Yes | Each line pre-filled from the card; edit quantities to actual consumption. The unit cost defaults to the item's WAC and can be overridden — the line is then flagged Overridden. |
| Outputs | Yes | Actual quantity produced per output line. |
| Labour | No | Actual hours per labour line. |
| Overhead | No | Actual driver quantities per overhead line; a variance indicator compares each line to the card. |
Output Types
A single production batch can produce multiple output types. Each type is treated differently in terms of value and inventory impact.
| Status | Meaning |
|---|---|
| Main | The primary intended output. Receives a share of the joint cost by the allocation method. Its inventory account is debited on finalization. |
| Co-Product | A secondary saleable output produced alongside the main product (e.g., cream produced when making butter). Receives a share of the joint cost by the allocation method and is debited to inventory on finalization. |
| By-Product | An incidental output with lower value. Its quantity × sell price is credited against the joint cost, so it reduces what Main and Co-Products carry. |
| Waste | Unusable output. No cost is allocated to waste — its portion is absorbed, reducing the effective yield and increasing the cost per unit of the saleable outputs. No stock and no journal line. |
Overhead Types
| Type | How It Works | Example |
|---|---|---|
| Variable | Scales with production volume through its driver. Rate = Amount ÷ Standard Base; the batch absorbs Rate × actual driver quantity. | Packaging material cost per unit, electricity per machine-hour |
| Fixed | The same amount per batch regardless of volume, absorbed through its driver. | Factory rent allocation, equipment lease, supervisor salary portion |
| Depreciation | Linked to a fixed asset. Absorbed into the batch and credited to the asset's depreciation account on finalization. | Production machinery depreciation allocated to each batch that uses the machine |
Allocation Method
When a production batch has multiple outputs (main product + co-products), the joint cost must be split between them. Three allocation methods are available:
| Method | How It Works | Best For |
|---|---|---|
| By Sales Value | Cost is split proportionally to quantity × sell price of each output. Higher-value outputs absorb more cost. | Outputs with very different selling prices |
| By Weight | Cost is split proportionally to the quantity of each output. | Outputs with similar value per unit |
| Manual % | You specify what percentage of cost goes to each output. Percentages must sum to 100. | Industry-standard splits or regulatory requirements |
Finalization — What Happens When You Finalize
Finalization is the action that completes a production batch, transfers costs to finished goods, sets their cost, and posts the journal to the ledger. Before finalization, a batch has no financial impact.
Update every material line with the actual quantity consumed. Update labour and overhead with actual hours and driver quantities. Record actual output quantities for each output line.
The batch page shows Materials, Labour, Fixed OH, Depreciation, Total Joint Cost and Output Qty, plus a Ledger Impact preview of the journal it will post.
Confirm the three effects listed: decrease raw material stock, increase finished goods stock, update item costs.
The finalization journal is created and posted immediately. The batch status changes to Finalized and the banner shows when.
What the Finalization Journal Does
| Account | Debit | Credit | Description |
|---|---|---|---|
| Inventory Account (each Main / Co-Product output) | Cost allocated to that output | — | Finished goods added to inventory |
| Inventory Account (each material) | — | Actual qty consumed × the rate on the line | Raw material inventory reduced as consumed |
| Expense account (each labour line) | — | Hours × rate | Labour cost transferred into production |
| Expense account (each Variable / Fixed overhead line) | — | Absorbed amount | Overhead cost transferred into production |
| Depreciation account (each Depreciation overhead line) | — | Absorbed amount | Asset depreciation transferred into production |
| Inventory Account (each By-Product) | — | Qty × sell price | By-product credit against joint cost |
After finalization:
- Raw materials decrease by the actual quantities consumed, valued at the rate on each line
- Finished goods increase by the quantity produced, at the cost allocated to each output
- The cost of each output item is set to the batch's cost per unit for that output
- The journal is posted and appears in the Finance ledger
Cost Per Unit
The cost per unit that results from finalization becomes the cost of the finished goods item. This is the number that flows through to COGS when the finished goods are eventually sold and delivered.
A finalized batch can be unfinalized. Unfinalizing voids the journal entry, reverses the stock movements, and returns the batch to editable. Because it reverses posted journal entries and item costs, unfinalize should only be used to correct a genuine error — not as a routine workflow step. Any deliveries that have already consumed the finished goods from this batch will have incorrect COGS if the batch cost changes after unfinalization.