Costing & Wastage
Track production costs, material wastage, and yield percentages to improve profitability.
Understanding the true cost of producing each product — and how much material is lost along the way — is critical for pricing, profitability, and process improvement. Without it, a bakery might price puff-puff at ₦200 per pack without realising each pack actually costs ₦180 to make, leaving almost no margin. Eleo’s costing and wastage tracking gives you visibility into both, so you can make data-driven decisions about your production operations.
Production costing
Every completed work order calculates the actual production cost of the finished goods by summing:
- Material Costs — The cost of all raw materials consumed, based on their purchase price or weighted average cost in inventory. For a pot of jollof rice this includes the tomatoes, rice, oil, seasoning, and peppers.
- Labour Costs — Optional labour charges associated with the production run. A small bakery might log 3 hours of a baker’s time at ₦1,500/hour for a cake batch.
- Overhead Costs — Any additional costs allocated to the production run, such as gas for the oven, generator diesel, or packaging materials.
The total production cost is divided by the output quantity to give you the cost per unit for the finished product. This figure is automatically used to value the inventory added by the work order.
Expected vs actual cost
When a work order is created, the system calculates the expected cost based on the recipe’s ingredient list and current material prices. After production is complete, the actual cost is calculated from what was really consumed. The variance between expected and actual helps you identify:
- Recipes that consistently cost more than expected — perhaps your tomato supplier raised prices and it is time to renegotiate or switch.
- Production runs with unusually high costs — maybe last Tuesday’s chin chin batch used 30% more oil than normal because the fryer temperature was too low.
- Opportunities to reduce cost per unit by optimising batch sizes. A shawarma kitchen might discover that doubling the batch from 50 to 100 wraps cuts the per-wrap cost by 15% because labour and gas are spread over more units.
Production costing relies on accurate material prices. When you receive new stock through inbound shipments or purchase orders, the updated costs are reflected in subsequent work order calculations automatically. If the price of a bag of flour jumps from ₦18,000 to ₦22,000, your next batch of bread will show the higher cost immediately.
Ingredient-level yield adjustment
Each ingredient in a recipe can have an expected yield percentage that accounts for process losses (trimming, peeling, evaporation, etc.). When the yield is below 100%, the system inflates the quantity used for costing so the true material cost is captured:
- Effective quantity = recipe quantity × 100 ÷ yield %
- Line cost = effective quantity × unit price
For example, if a recipe requires 500 g of fish at 75% yield (25% lost to de-boning), the effective quantity is 500 × 100 ÷ 75 = 667 g. The material cost is then calculated on 667 g, not 500 g, giving you an accurate picture of what the ingredient truly costs. This adjustment is visible in the Cost Breakdown table on the recipe detail page.
Wastage tracking
Material waste is an inevitable part of most production processes, but tracking it helps you minimise losses over time. Eleo lets you record waste at the work order level with:
- Waste Quantity — How much material was lost during production. For instance, 1.5 kg of dough that stuck to the tray and could not be used.
- Waste Reason — Categorise the cause: spoilage (milk curdled overnight), damage (bag of flour torn during handling), process loss (oil absorbed during frying), equipment failure (oven overheated and burnt a tray), expired materials, or other.
- Waste Cost — The monetary value of the wasted material, calculated automatically from material costs. This makes it easy to see, for example, that last month’s spoilage alone cost ₦45,000.
Work-order yield tracking
Separately from the per-ingredient yield set on recipe inputs, Eleo tracks overall yield at the work-order level by comparing the actual output quantity to the expected output from the recipe:
- A yield of 100% means all input materials were converted to finished goods with no loss.
- A yield below 100% indicates material loss during production. The gap represents process waste.
- Tracking yield over time reveals trends. If your bakery’s bread yield dropped from 95% to 85% over two weeks, it could point to oven issues, inconsistent dough preparation, or a bad batch of yeast.