Cost Tracking & COGS
Understand how IEMSuite calculates Cost of Goods Sold (COGS) from production batches, tracks overhead, and generates cost analysis reports.
IEMSuite calculates Cost of Goods Sold (COGS) at the production batch level, combining actual material costs with overhead allocation to give you a precise per-unit manufacturing cost.
How COGS Is Calculated
COGS = Material Cost + Overhead Cost
COGS per Unit = Total COGS ÷ Actual Output Quantity
COGS is finalized when a production batch is closed. It uses the actual lots consumed (with their landed cost per unit) - not estimates or recipe cost.
Material Cost
Each raw material lot has a cost per unit set at inbound time (or calculated from production if it is a semi-finished product). Material cost is:
Material Cost = Σ (lot.costPerUnit × quantity_consumed)
If a lot's cost per unit was not set at inbound time, it defaults to zero - which understates COGS. Always enter the landed cost when logging inbound stock.
Overhead Costs
Overhead costs are additional manufacturing costs not tied to specific raw materials: labor, energy, machine depreciation, packaging, etc. You can add overhead lines to a production batch in the Costs tab:
- Fixed overhead - a flat amount for the batch (e.g., $200 labor)
- Per-unit overhead - cost per output unit (e.g., $0.05/unit packaging)
COGS per Unit
Once the batch is closed and overhead is entered, IEMSuite calculates:
- Total material cost
- Total overhead cost
- Total COGS
- COGS per unit of output
- Variance from recipe estimate (planned vs. actual)
The output stock lot's cost per unit is set to the COGS per unit, so when this lot is later used as a raw material in another recipe, its cost flows through correctly to the downstream product's COGS.
Cost Reports
Access cost reports in Inventory → Cost Analysis:
- Cost by Product - average COGS per unit for each SKU over a period
- Cost by Batch - detail view for a single batch with full cost breakdown
- Cost Trend - chart showing COGS per unit over time (detect rising material costs)
- Overhead Breakdown - what percentage of COGS is material vs. overhead
Margin Analysis
The Margin Analysis report combines COGS data with order revenue data to show gross margin per product and per order. Filter by date range, product, or customer segment.