Product Cost (Unit Cost)

Product cost (or unit cost) is the cost to your company for making/manufacturing or purchasing a product that you sell. The cost is used to calculate profit (selling price minus the cost). You specify the unit cost in Product Setup in the 'Settings' tab.

If however you are using compound items, you can let ROBOTILL automatically calculate the cost for you. There are two ways in which the system can calculate the cost of a product for you:

Calculating Sub Item Cost

An example would be if you use eggs as an ingredient. You would want to setup an 'Egg' product that is part of an Ingredient category (hidden from the POS modules). That way you can easily specify how many eggs each product requires in order to keep track of your stock on hand.

You however don't receive single eggs but Egg trays of 18 eggs. You then create a compound item called 'Eggs 18' that consists of a sub item of 'Egg' with a quantity of 18. That way you can easily receive multiple trays of eggs and use single eggs when making your products, but still keep track of your stock.

In order to be able to calculate the cost of other compound items (like a breakfast you sell containing eggs as a sub item), you will need to specify the correct cost for a single egg. To do this you simply enter the cost for the 'Tray of 18 eggs' and then go to the Sub Items tab.

Apply Cost to Sub Items

Click on 'Apply Cost to Sub Items'. ROBOTILL will calculate the cost for the individual eggs and update the 'Egg' item.

Note that if the cost for the compound item (Eggs 18) changes, you need to click on 'Apply Cost To Sub Items' to apply the new cost to the sub items again. Unlike 'Calculating Cost From Sub Items', the system will not automatically calculate and apply new cost. The reason for this is that an item can be part of multiple compound items and compound item cost should not always be applied to sub items.

Calculating Compound Item Cost

An example would be if you have an item called 'Breakfast' that consists of multiple sub items - for this example we only make the breakfast have 2 eggs and 2 slices of bread.

Calculate cost from sub items

Note that the bread is 0.1 as you are using 2 slices of a 20 slice bread (2 / 20 = 0.1)

If the sub item cost is correct, then you can simply click on 'Calculate Cost From Sub Items'. The system will calculate the cost of the compound item using the cost of the sub items. The new cost will be entered into the 'Unit Cost' field in the Settings tab. To apply the new cost, click on 'Update Item'.

You can also check the 'Auto Update Cost From Sub Items' option. This will automatically change the cost of the compound item if one of the 'costs' of a sub item is changed in the product setup screen or the 'Price Maintenance' screen.

Note that if you update product costs of sub items with a file (see Bulk Import and Update) you will need to run the Product Cost Calculation from Tools > Database > Recalculate Product Costs.