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Prerequisites

Logged In & Role

  • -You are logged into the CGIC App.
  • -Your role is Production Manager or Manufacturing user

Warehouse & Currency

  • -All items and operations use consistent UOM and the same Currency (e.g., NGN).
  • -Your company’s default currency is set under Accounts > Company.

Items & BOMs

  • -Finished‐goods and all component items exist under Stock > Item > Item List.
  • -A submitted (Active) BOM for the finished product is available under Manufacturing > Bill of Materials > BOM List.

Cost Data Configured

  1. -Each raw material item has a valid Standard Buying Rate (latest purchase cost) in its Item record.
    • -Each operation in the BOM has an Operating Cost (labor or machine cost per unit or fixed batch cost) entered.
    • -(Optional) Overhead or fixed cost components (e.g., utilities, packaging) are defined via custom BOM fields or in the Costing tab.

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1.0 Open the BOM and Confirm Cost Settings

  1. Navigate to BOM List
    • Go to Manufacturing > Bill of Materials > BOM List.
    • Locate the BOM for your finished product (e.g., “BOM-Danaval-Chocolate-001”) using search or filters.
  2. Open the BOM Profile
    • Click the BOM No. to open the BOM form.
    • Ensure the BOM’s Status is Submitted (Active). If not, use New Version, update and Submit a new version.
  3. Verify Raw Material Rates
    • In the Production Item tab, scroll to the Materials table.
    • Confirm each component’s Required Qty and UOM are correct.
    • Check that each raw material’s Standard Buying Rate (in its Item master record) is up to date.
  4. Verify Operation Costs
    • Click the Operations tab.
    • Confirm each row lists a valid Operation Time and Operating Cost (NGN).
    • If operation costs need updating (e.g., labor rate changes), click New Version, adjust costs, then Submit the new BOM version.

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2.0 Update BOM Costing

  1. Open the Costing Tab
    • Within the BOM form, click the Costing tab.
    • The tab shows a Cost Breakdown:
      • Raw Material Cost (sum of each component’s Required Qty × Buying Rate)
      • Operation Cost (sum of each operation’s time × operation cost)
      • Additional Costs (if you’ve defined overhead, packaging, or fixed charges)
      • Total Cost per Batch and Cost per Unit
  2. Recalculate Costs
    • Click Update Cost (usually a button near the top of the Costing tab).
    • CGIC automatically pulls the current Buying Rates from each raw material’s Item record and the latest Operating Costs from operations.
    • The system displays:
      • Cost of Raw Materials: e.g., 100 units × 50 NGN each = 5,000 NGN
      • Cost of Operations: e.g., Operation A (100 units × 0.5 min × 10 NGN per min) = 500 NGN; Operation B (fixed 200 NGN) = 200 NGN
      • Overheads / Packaging: 300 NGN (if defined)
      • Total Batch Cost: sum of all component and operation costs (e.g., 5,000 + 700 + 300 = 6,000 NGN)
      • Cost per Unit: Total Batch Cost ÷ Quantity to Manufacture (e.g., 6,000 NGN ÷ 100 units = 60 NGN per unit)
  3. Review Cost Details
    • Scroll through the Cost Components table to see each raw material line with its cost contribution and each operation’s cost.
    • Verify that the Total Batch Cost matches your expectations.
    • If any component’s rate appears incorrect, update the item’s Standard Buying Rate under Stock > Item and click Update Cost again.
If you notice a significant cost difference, confirm that UOM conversions are correct (e.g., if raw material is purchased in “Kg” but BOM uses “g,” CGIC will convert automatically if UOM conversions are defined).

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3.0 Generate a Cost Estimate Report

  1. Export Costing Data
    • In the Costing tab, click Download > CSV or Print to get a detailed breakdown of material, operation, and overhead costs.
    • Save or distribute this PDF/CSV to finance, pricing, or management teams.
  2. Pin to Dashboard (Optional)
    • If you frequently need cost estimates, click the Add to Dashboard icon to pin a “BOM Cost Summary” widget.
    • Configure the widget to show Cost per Unit and Total Batch Cost for quick reference.
Use the cost output to compare BOM versions—see how recipe changes (e.g., switching to a cheaper raw material) impact overall cost.

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4.0 Integrate Cost Estimates with Work Orders

  1. Create a Work Order
    • Navigate to Manufacturing > Work Order > New.
    • Select the finished product under Production Item.
    • Confirm the Quantity to Manufacture (e.g., 100 units).
    • The BOM field auto-populates with the active BOM you just costed.
  2. View Estimated Cost
    • Once the system fills in BOM information, scroll to the Costing section within the Work Order.
    • CGIC copies the Cost per Unit and Total Batch Cost from the BOM.
    • Confirm these values before submitting the Work Order.
  3. Submit the Work Order
    • Click Save, then Submit.
    • The Work Order now carries the estimated production cost—visible in reports like Production Costing Report under Manufacturing > Reports.
If you modify the Work Order quantity, click Refresh on the cost fields to recalculate batch and unit costs automatically.
By following these steps to estimate production costs based on your BOM, you equip your team with clear, accurate manufacturing cost data—enabling informed pricing decisions, tighter budgeting, and improved financial visibility. Leveraging CGIC’s automated cost roll-up ensures every raw material and operation cost is accounted for, giving you confidence in your cost forecasts before production begins.