Batch Cost and Accounting

Who can see it: View production costs and margins

6.1 The Costing Rules

• Materials are valued at their moving average cost when issued
• Labour and power are valued at the logged hours and rates. Piece work uses good pieces × the piece rate
• Outsourced steps add the supplier service cost once
• Normal loss is the loss the recipe allows. Its cost is absorbed by the good units
• Abnormal loss is loss beyond normal loss. It is valued at the cost per expected good unit, before fixed overhead, and written off to 5170 Abnormal production loss
• Fixed overhead is applied per good unit at the normal-capacity rate, weighted by the recipe's overhead units per item
• By-products reduce the batch cost by their selling price less the cost to sell

The batch cost is then:

1. Expected good units = planned units less normal loss (rounded down for count products)
2. Cost before overhead = materials + labour + power + outsourced − by-products
3. Abnormal loss = cost before overhead ÷ expected good units × abnormal units
4. Overhead = good units × overhead rate × overhead units per item
5. Into finished goods = cost before overhead + overhead − abnormal loss
6. Unit cost = into finished goods ÷ good units

6.2 Worked Example

A soap maker plans 40 bars of shea butter soap on order PRD-2026-00012. The recipe allows 1.5% normal loss. Settings has fixed factory costs of GH₵2,400.00 a month and normal output of 6,000, so overhead is GH₵0.40 per good unit; the recipe counts each bar as one overhead unit. Materials issued cost GH₵46.32. No labour or power time was logged on this small trial batch. The team records 38 good bars and 2 rejects.

The normal-loss bar adds nothing extra: its cost is spread across the 38 good bars. The abnormal bar is valued before overhead, because overhead only goes on good units. The batch cost page shows the unit cost as GH₵1.59; the stored value keeps four decimal places (GH₵1.5876).

6.3 What Posts to Accounting

When Accounting is on, each step posts its own journal. The journal reference is the production order number, and each description names the order. For the example:

Materials issued · PRD-2026-00012

Output recorded · PRD-2026-00012 moves the cost so far for the good units into finished goods: 46.32 ÷ 39 × 38 = 45.13.

Batch finished · PRD-2026-00012 adds the overhead, tops finished goods up to the final value and writes off the abnormal loss.

Finished goods now hold GH₵60.33 (45.13 + 15.20) and work in progress is back to zero (46.32 − 45.13 + 15.20 − 16.39).

If you click Save as partly done instead of Finish batch, the output journal is described Partial output · PRD-… rather than Output recorded · PRD-…. The figures follow the same rules.

6.4 Every Production Journal

Materials and work are dated on their issue or work day. Output is dated on its made-on date. The finish journal is dated on the day you finish.

Accounting does not let anyone edit, delete or reverse these journals directly, including reversal journals they own. It shows Correct this journal in Manufacturing. The Reference and Open production order, Open job or Open excise return link back to the source when you may open it. Without source access, the Reference stays plain text. Correct the source in Manufacturing; disabling Manufacturing does not allow general Accounting corrections.

6.5 If Accounting Is Not Enabled

Production, costing, reports and month locks all work without Accounting. The batch cost page shows the same cost movements under What it posted, marked Production record · Accounting was off, with the note "Accounting is not enabled. These are the production cost movements; no journals were posted."

Work recorded while Accounting is off is not applicable for posting. If you switch Accounting on later, that history is never replayed into the ledger. The order page says "Work recorded while Accounting was off is kept in Manufacturing only. Enabling Accounting does not post this history." Book any opening balances through Accounting's normal process.

6.6 When a Posting Fails

Physical work always stays saved, even if Accounting refuses its journal, for example because the period is closed or an account is inactive. The order's Accounting postings panel shows each pending or failed posting with its reason:

• Pending posting
• Posting failed · next retry …
• Automatic retries stopped · correct the issue and retry manually
• Retry paused · Accounting is off — for a posting that failed before Accounting was switched off. It resumes when Accounting is back

An hourly task retries failed postings by itself, waiting 1, 2, 4 and then 8 hours between attempts, and stops after five attempts. Automatic retries post under a system identity; the journal keeps who recorded the original work. Home lists orders with Failed production postings.

To retry by hand, correct the cause, then click Retry posting on the order. It needs Finish production batches. Each source posts once and keeps its original date. A closed manufacturing month must be reopened before you post into it. Never make a second manual journal for the same work.

6.7 The Batch Cost Page

Where to find it: Sidebar > Insight > Reports > a batch

• Cost per unit, with the recipe estimate
• Against the recipe, per unit, with the percentage more or less
• Good units, of planned, with expected good units
• Margin at the current selling price, before VAT
• What it cost — materials, labour, power and generator, outsourced steps and factory overhead, each with Recipe estimate, Actual, Difference and Why
• Waste — units allowed by the recipe, and units beyond normal loss with their value
• How the unit cost is worked out — the calculation in 6.2
• What it posted — every journal or production record with account, debit and credit, and the work in progress still remaining

A run with several outputs shows one cost for the full run; every output uses the final unit cost. If month end later lowered the overhead, a Month-end valuation adjustment section shows the adjusted unit cost; the original record stays unchanged. Print batch record (PDF) downloads the page and Trace this batch opens its trace.

6.8 Shared Inventory NRV Reviews

Finished goods and made materials use the shared Inventory > Reports > NRV Reviews workflow, not a separate Manufacturing valuation engine. Review entry is optional and off by default. Preparation, independent approval and cost visibility are separate permissions. The original production costs and batch record remain historical evidence; the batch cost page and PDF show a separate Current Inventory carrying pool when permitted.

NRV is expected selling price less completion and selling costs. Ten units costing 100 each with NRV 80 post a separate 200 loss without changing quantity. Only positive non-variant weighted-average product/location pools are supported; partial-batch/FIFO estimates and unfinished provisional output are refused. Current pool figures include later receipts and are not physical lot balances.

Issues, source-linked returns, sales and transfers retain immutable loss allocations. Later above-normal overhead corrections release overlapping loss first, then reduce remaining stock, cost of sales, recovered components or downstream WIP. A reassessment cannot recover loss belonging to sold or consumed units, or lift stock above its remaining historical cost. New purchases are not automatically written down.

Accounting is required for financial posting, including an overlap release or an affected disposal/return after review entry or Manufacturing is disabled. The original source accounts stay protected. If Accounting is unavailable, restore access before the affected financial action; no silent posting bypass or historical backfill is performed. Stock movement and production history remain unchanged.