Cost of goods sold

Cost of goods sold, or COGS, is what the things you sold cost you to make. Not what you spent this month, and not what a recipe says on paper. The distinction matters because the two diverge exactly when it counts.

Buy 200 kg of habaneros in September at the harvest price and you have spent the money in September. If half of it becomes sauce in November, half of that cost belongs to November’s sales. Spending and cost of sales are different clocks.

Why the recipe figure is not enough

A recipe cost tells you what a batch should cost. COGS is what it did cost, which includes the parts a recipe does not mention:

• The price you actually paid, through the weighted average cost, including delivery fees.
• Yield, because you buy the input and sell the output. See yield.
• Packaging, counted per unit sold.
• Labor, equipment and overhead, when you charge them to the batch. See what counts in a unit cost.

A worked example

A 20 L batch that costs €86.42 to make and yields 19.2 L after cooking off, filled into 250 ml jars:

Batch cost	€86.42
Yield	19.2 L, so 76 jars
Sauce per jar	€1.14
Jar, lid, label	€0.70
Cost per jar sold	€1.84

Sell that jar at €6.90 and the gross margin is €5.06, or 73 %. Compute it off the recipe alone and you would have used €1.08 for the sauce, because the recipe does not know that 800 ml boiled away.

Where it comes from in BatchDash

Every completed run records its real cost at completion, from the ingredient costs of that day. Selling draws from a specific lot of finished stock, so a sale is attached to the batch that made it, and the margin on a sales order is computed against what that batch really cost.

The reports read the sealed records rather than recomputing from today’s prices, which is why a margin you looked at last quarter still shows the same figure today.

The pitch version is on the costing page.