Fixed Cost Allocation (spread utility cost over all batches after month end)

Hi everyone,

Maybe it’s already working in Breww, but i haven’t found the way to do it…

Since fixed costs (e.g., rent, salaries) are divided by the number of liters packaged. It would be great to be able to enter fixed costs on a monthly basis and allocate them across the batches packaged in the given month?

If I package 5,000 liters in September and my rent is $5,000, that comes to $1 per liter. If I package 10,000 liters, it comes to $0.50 per liter, which directly impacts my margins.

Thanks

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I dunno if you can do it by litre packaged directly? You can add utility / other costs by volume into initial vessel.

It’s in production settings somewhere. I guess these will carry through to packaged volume. But that doesn’t take account of actual production volumes per month. So isn’t quite what you’re after. Unless you have a firm production plan and can do the per volume rent sums yourself. I mean, you should have an annual production estimate, which might be close enough?

Unless there’s another way? If not, it’s going to be a bit tricky - at the start of the month, you don’t necessarily know how much volume you’re going to do in the rest. So how much rent to allocate to the first batch? Retrospectively? At month end? Is that the idea? That Breww should share out some fixed costs every month end and assign them to batches produced in that month?

Me, I’d leave it to the accountants. :grinning_face:

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Thanks for the suggestion, Patrick, and Jon is right about the pitfall here - if you don’t know how much cost to allocate until after the month is finished, you have to retrospectively change the cost of goods. While possible, this would likely cause other accounting headaches/adjustments/confusion.

I’m happy to leave this request open for votes (you should vote for it too), but wanted to confirm that there is a complication/downside to it, which might mean that it’s not necessarily the best solution.