How is the batch cost calculated?

Batch cost is material plus labour plus overhead plus packaging. For a 250 kg batch of an ingredient blend at 4.50 per kg, 4 hours with a crew of 2 at 21 per hour and overhead of 45 per batch hour, material is 1,125, labour 168 and overhead 180, so the batch costs 1,473. With 237.5 kg saleable (95 percent yield) the cost is 6.20 per kg, the same answer as the Batch Cost calculator.

How do I set a price that meets my margin target?

Divide the cost per pack by one minus the target margin. A pack costing 1.33 with a 30 percent gross margin target needs a price of 1.33 / 0.70 = 1.90. The Price at target column does this for every recipe, so you can compare it with the price you charge today.

Why does yield matter so much?

Because you pay for every kilogram you charge but sell only what is left. A chutney that loses 18 percent to evaporation spreads the cost of 252 kg of ingredients over 207 kg of product, raising the cost per kg by 22 percent. Type the yield you actually measure, after cooking, transfer and filling losses.

Can I mix kilograms and pounds?

Yes. Each ingredient price can be per kg or per lb, and each recipe line can be in kg, g, lb or oz. Everything is converted exactly to kilograms (1 lb = 0.45359237 kg, 1 oz = 0.028349523125 kg), so a cheese invoiced at 7.48 per lb is costed at 16.49 per kg.

Does it track actual batches and variances?

No. It is a standard cost model: it costs each recipe as written, at today's prices and your expected yield. To measure actual material usage or yield against standard, compare a batch record with these figures, or use the Batch Cost calculator for one actual batch.

Industry Cost Kits

Recipe and Batch Costing Excel Template

Cost every recipe from its ingredients, yield, batch labour, overhead and packaging, and see cost per kg and per pack, gross margin and the price that meets your margin target.

Overview

This recipe and batch costing workbook is for owners, production managers and cost accountants at food and beverage makers and other batch processors who need to know what each product really costs and whether its price still works. It ships with six fictional recipes for a sauce and dressing maker, so the dashboard is populated when you open it; replace the ingredients, recipes and prices with your own and everything recalculates.

Ingredient prices are typed once on Setup, per kg or per lb, and each recipe line converts its quantity exactly to kilograms and multiplies by the price per kg. Each recipe adds its lines to a charged mass and material cost, applies its yield to get the saleable mass, and adds labour (batch time x crew x labour rate), overhead (batch time x overhead rate) and packaging (packs x packaging per pack). Batch cost over saleable mass is the cost per kg, the same arithmetic as the Batch Cost calculator on this site, and gross margin against the selling price uses the same formula as the Recipe Gross Margin calculator.

In practice, update ingredient prices when a supplier quote changes and read the Dashboard: the cost per pack chart shows whether material, labour or packaging drives each product, the margin chart shows which recipes fall below target, the Price at target column gives the price you would need, and the ingredient Pareto shows which two or three ingredients carry most of the monthly spend. In the example, parmesan, egg yolk and oil push the Caesar dressing below a 30 percent margin target.

What this template includes

Ingredients list on Setup with purchase prices per kg or per lb, converted exactly to a price per kg
Recipe Lines table: each ingredient's quantity per batch in kg, g, lb or oz (converted exactly), line cost, share of the batch and share of the recipe's material cost
Recipes table: yield, batch time, crew, pack size, packaging and selling price per recipe, with charged and saleable mass, material, labour, overhead and packaging cost
Cost per saleable kg, cost per pack, gross margin with a status word against your target, and the price per pack that gives exactly the target margin
Check columns that name problems in words: ingredient not on the list, recipe with no lines, price below cost, the same ingredient twice in a recipe
Dashboard with KPI tiles for margin on planned volume, gross profit and ingredient spend per month and the number of recipes below or near target
Three native charts: cost per pack by component, gross margin by recipe against target, and a Pareto of monthly ingredient spend
Method sheet with every formula, and a Verify sheet that re-checks the workbook against an independent reference, including the Batch Cost and Recipe Gross Margin calculators' examples

Suggested use case

Use it to price a new product, to see which recipes an ingredient price rise hurts most, to decide which lines to reformulate or reprice, or to set standard costs for sauces, dressings, beverages, cosmetics, coatings or other batch-made products.

How to use it

On Setup, enter your company name, currency, labour rate, overhead rate per batch hour and gross margin target.
Replace the example ingredients with your own and their delivered purchase prices per kg or per lb.
On Recipes, add one row per product with its yield, batch time, crew, pack size, packaging cost, selling price and planned batches per month.
On Recipe Lines, add each recipe's ingredients and quantities per batch.
Fix anything the Check columns flag, then read the margins, target prices and ingredient Pareto on the Dashboard.

Frequently Asked Questions

How is the batch cost calculated?: Batch cost is material plus labour plus overhead plus packaging. For a 250 kg batch of an ingredient blend at 4.50 per kg, 4 hours with a crew of 2 at 21 per hour and overhead of 45 per batch hour, material is 1,125, labour 168 and overhead 180, so the batch costs 1,473. With 237.5 kg saleable (95 percent yield) the cost is 6.20 per kg, the same answer as the Batch Cost calculator.
How do I set a price that meets my margin target?: Divide the cost per pack by one minus the target margin. A pack costing 1.33 with a 30 percent gross margin target needs a price of 1.33 / 0.70 = 1.90. The Price at target column does this for every recipe, so you can compare it with the price you charge today.
Why does yield matter so much?: Because you pay for every kilogram you charge but sell only what is left. A chutney that loses 18 percent to evaporation spreads the cost of 252 kg of ingredients over 207 kg of product, raising the cost per kg by 22 percent. Type the yield you actually measure, after cooking, transfer and filling losses.
Can I mix kilograms and pounds?: Yes. Each ingredient price can be per kg or per lb, and each recipe line can be in kg, g, lb or oz. Everything is converted exactly to kilograms (1 lb = 0.45359237 kg, 1 oz = 0.028349523125 kg), so a cheese invoiced at 7.48 per lb is costed at 16.49 per kg.
Does it track actual batches and variances?: No. It is a standard cost model: it costs each recipe as written, at today's prices and your expected yield. To measure actual material usage or yield against standard, compare a batch record with these figures, or use the Batch Cost calculator for one actual batch.