Manufacturing software that tells you what a unit cost
Most small manufacturers know their selling price exactly and their cost approximately. The gap is where the year’s profit hides — in wastage nobody booked, job work nobody reconciled, and material issued to the floor that never came back as anything.
| Element | Planned | Actual | Variance |
|---|---|---|---|
| Material cost | 1,51,737.60 | 1,58,420.00 | +6,682.40 |
| Labour | 24,000.00 | 24,000.00 | 0.00 |
| Wastage — normal | 4,200.00 | 4,190.00 | -10.00 |
| Wastage — abnormal | 0.00 | 2,480.00 | +2,480.00 |
What manufacturers use it for
Multi-level bills of material
Sub-assemblies with their own BOMs and their own costs, rolling up so the finished item shows what it really took to build.
Planned against actual
What the BOM said it should consume, against what the run actually consumed. That variance is the most useful number on the shop floor.
Job work both ways
Goods sent out on a challan stay on your books at the job worker, and what returns is reconciled against what went — including the wastage they are allowed.
Wastage split properly
Normal wastage goes into the cost of the product; abnormal wastage goes to the profit and loss. Merging them is how a costing sheet starts lying.
Work in progress
Material issued to the floor but not yet converted sits as WIP instead of disappearing between two stock figures.
Costs that move with prices
When steel or resin moves, the next run costs what it actually cost. Old runs keep their own cost, which is what makes a margin trend meaningful.
How a factory sets it up
- Write the bills of material. Components, quantities per unit and expected wastage — start with your five highest-volume products rather than all of them.
- Raise production orders. tBiz shows what components the run needs and what you are short of before the floor starts.
- Post the production. Components consumed, finished goods received, cost computed from what was actually used.
- Read the variance. Planned against actual, per run, per product, per month.
Manufacturing questions
Do I need to write a BOM for every product?
No, and you should not start that way. Write them for your highest-volume products first — those usually account for most of the cost and most of the variance, and the rest can follow once the habit is established.
How does tBiz handle job work?
Goods go out on a job work challan and remain your stock at the job worker’s premises. What comes back is reconciled against what went out, with the allowed wastage accounted for, so material does not quietly vanish at a third party.
Can I see cost per unit for a specific run?
Yes, with material, labour and overhead separated and traceable back to the vouchers behind them — and compared against what the BOM predicted.
Does it handle assembly rather than full manufacturing?
Yes, and it is simpler: assembly is a one-level BOM. The value is the same — the assembled item carries a real cost instead of an estimated one.
Related
Cost one product properly
Write one bill of materials free and find out what your best-selling unit actually costs.