Planned vs. Actual Costs

Planned vs. Actual Costs

Every completed production order in CrafterBy shows two cost figures side by side: what you planned to spend and what you actually spent. The gap between them — the variance — is one of the most useful numbers in your business.

The Two Cost Figures

Planned Cost

The planned cost is calculated from your product's bill of materials at the time the production order was created. It represents the theoretical cost of producing the batch if everything went exactly according to plan — precise quantities, no waste, no unexpected time. The planned cost is fixed when the order is saved and does not change.

Actual Cost

The actual cost is built up from everything logged during the production run:

• Material consumption logs (quantities x unit costs)
• Labour entries (hours x hourly rate)
• Machine hour logs (hours x machine hourly rate)

The actual cost is only finalised when the order is marked Completed. Up until then, it shows a running total of what has been logged so far.

Variance

Variance is actual minus planned, expressed as an amount and a percentage. A positive variance means you spent more than planned. A negative variance means you came in under budget.

Example: Soy Candle Batch of 50 Units

In this batch, the actual cost was EUR 13.70 (8.4%) higher than planned. Planned cost per unit: EUR 3.26. Actual cost per unit: EUR 3.53.

If you sold these candles at a price calculated from the planned cost, your margin is EUR 0.27 per unit lower than expected. Over 500 units, that is EUR 135 of margin you did not account for.

Reading the Variance Breakdown

Look at each cost category separately:

• Materials +EUR 6.20: You used more raw materials than the BOM specified. This could be normal waste or a measurement error. Check which specific materials drove the overage on the Materials tab.
• Labour +EUR 7.50: The batch took longer than estimated. Was this a one-off (new assistant, distractions) or consistent? If consistent, your BOM labour estimate is too low.
• Machine EUR 0.00: Machine time was exactly as planned. Your machine estimates are accurate for this product.

Acting on Variance Data

Single-order variances can be noise — an unusual batch, a disrupted working session, a one-off material issue. The real value comes from reviewing variances across multiple production runs of the same product.

If your last five candle batches have all shown +5-10% material variance:

1. Go to the product definition for Lavender Soy Candle.
2. Edit the material quantities — increase the wax quantity by 4-6% to account for actual waste.
3. Recalculate the product's planned cost.
4. Review whether your selling price still achieves your target margin at the updated cost.

This is the improvement loop: produce, measure, compare, adjust. Over time, your planned costs converge with your actual costs, your pricing becomes accurate, and your margins become predictable.

Cost per Unit

The completed production order also shows the actual cost per unit — the total actual cost divided by the number of good units yielded. This is the most important number for pricing: it reflects the real cost of producing one unit of this product, in this batch, at this scale.

Batch size affects unit cost: larger batches spread fixed labour time across more units, reducing cost per unit. CrafterBy's production history lets you compare unit costs across different batch sizes for the same product, helping you identify the most cost-efficient production quantities.