Excel Skills | Product Costing Template

Instructions
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This template enables users to compile product costings for all the manufactured products that are produced by a business.
The product costings are based on the purchase prices that are entered for all bought-in stock items and the bills of material On
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(“recipes”) that are compiled for each manufactured product. The template includes a detailed product cost review sheet, This
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what-if cost calculations for cost analysis purposes and quantity forecast calculations that can be used for requirements on
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planning or stock usage measurement. The unique design of this template enables users to create an integrated costing
model for all manufactured products.

The following sheets are included in the template:

StockCode - create unique stock codes for all bought-in and manufactured products on this sheet. The product costs and
what-if costs of all stock items are calculated based on the purchase prices of bought-in products that are entered on this
sheet and the bills of material that are linked to the manufactured products on the BOM sheet. The forecast quantities are
calculated based on the finished product quantities that are entered on the Forecast sheet.
BOM - link each manufactured product to the appropriate stock components on this sheet. All the product costings of
manufactured products are calculated based on the components that have been linked to the appropriate product code on
this sheet.
Costing - view a detailed product costing for any manufactured product by selecting the appropriate stock code from the list GET
box in cell A4. A comparison between the product costing and the what-if costing is also included on this sheet. Aside from
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selecting the appropriate stock code, this sheet requires no user input.
Forecast - enter the finished goods quantities that should be used in order to calculate a requirements planning forecast.
The calculations on this sheet can be used for requirements planning or stock usage measurement purposes. The bought-in
stock quantity forecast that is calculated is included on the StockCode sheet.
Margins - this sheet includes a comprehensive analysis of selling prices, product costs, what-if costs and gross profit
amounts and percentages.

Stock Codes

The first step in customizing the template for your business is to create a unique stock code for each stock component and
finished (manufactured) product on the StockCode sheet. Stock components can only be linked to a manufactured product if
a stock code has been created for the appropriate stock item.

A stock code convention that makes sense in the context of your business should be used and the stock code convention
should make it easy to identify stock items based on the stock code that is assigned to each stock item. The template can
accommodate any stock code convention but we suggest using a combination of letters and numbers. In our example, we
have used a combination of four numbers and three letters for finished products and a combination of two letters and two
numbers for bought-in and intermediate stock items.

Note: The two letters that are used in the bought-in and intermediate products assists users in identifying the type of stock -
for example, RM refers to raw materials, LB refers to labour and SD refers to intermediate products. Note that even though
labour is not actually a stock item, we also assign a stock code to labour cost in order to include this type of direct cost in the
product costings. The same principle can be applied in order to include other direct costs like overheads or even distribution
costs in the product costings.

Once you have decided on a stock code convention, you can create a unique stock code for each stock item that should be
included in the product costings. The StockCode sheet includes the following columns:
Stock Code - enter a unique stock code in accordance with the stock code convention that is suitable for your type of
business.
Description - enter a description of the stock item. This description should enable users to easily distinguish between stock
items.

UOM - the unit of measure (UOM) refers to the stock measurement that is used when ordering, manufacturing and counting
stock. Note that stock components are also included in the product costings based on this unit of measure. For example, if
the recipe of a manufactured product stipulates that a specified quantity in kilogram of a raw material stock component
should be added during manufacturing, it will be easier to cost the product based on a unit of measure of kilogram even
though the raw material component may be ordered from a supplier in bags. For the purpose of this template, recipe (and
therefore costing) units of measure carry more weight than the units of measure that is used by suppliers.

Purchase Price - the most important aspect of the purchase price is that it should be in the same unit of measure as the unit
of measure that is specified in the UOM column. If a stock component is ordered from a supplier in another unit of measure,
the purchase price should be converted to the unit of measure that is specified in the UOM column. Purchase prices should
be entered excluding sales tax if the sales tax amounts can be claimed back from the appropriate tax authorities.

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Excel Skills | Product Costing Template
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What-If Cost - the what-if purchase price should be entered in this column. This column forms part of the what-if costings
which enable users to measure the sensitivity of product costings to component purchase price fluctuations. Refer to the On
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What-If Costs section of these instructions for more information on the what-if cost analysis feature. This
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Note: All the columns on the StockCode sheet with a yellow column heading require user input. The columns with a light blue
column heading contain formulas that should be copied from one of the existing rows for all new stock codes that are added
to the sheet.

Error Code - the formulas in this column display an error code if there is a problem with the data that has been entered in
any of the user input columns. This column should therefore be blank if all user input has been entered correctly. If any error
codes are reflected in this column, the errors should be investigated and rectified in order to ensure that all template
calculations remain accurate. Refer to the Error Codes section of these instructions for guidance on how to correct the
appropriate user input errors.
Product Type - this column indicates whether the stock code relates to a stock item that is bought-in from a supplier or to a
product that is manufactured. A product costing should be compiled for all manufactured products by linking the
manufactured product and its components on the BOM sheet. The formula that has been entered in this column therefore
checks whether the stock code is included in column A on the BOM sheet and if so, identifies the product as a manufactured
product. Alternatively, the product is deemed to be a bought-in product.
Product Cost - this column contains the product cost of each stock code. If a product is classified as a bought-in stock item,
the product cost equals the purchase price that is specified in column D. If the product is classified as a manufactured
product, the product cost is calculated based on the components that have been linked to the product on the BOM sheet and
the appropriate purchase prices, input quantities and yields of the linked components. The Product Cost column therefore
contains the product costs of all stock items.
What-If Cost - this column contains the what-if costs of each stock code. The what-if costs are calculated on the same basis
as the product costs, but the what-if costs in column E are used instead of the purchase prices in column D for all stock
components. The input quantities and yields of all the components that have been linked to the manufactured stock items on
the BOM sheet are exactly the same. Refer to the What-If Costs section of the instructions for more information on the
calculation of what-if costs.
Quantity Forecast - the formulas in this column calculate the stock quantities that are required in order to produce the
finished goods quantities that are entered on the Forecast sheet. Refer to the Quantity Forecast section of these instructions
for guidance on how the forecast quantities are calculated.
Value Forecast - the value forecast is calculated by multiplying the quantity forecast by the stock purchase prices of the
appropriate bought-in stock items in column D.
What-if Value Forecast - the what-if value forecast is calculated by multiplying the quantity forecast by the what-if stock
purchase prices of the appropriate bought-in stock items in column E.

Note: Purchase prices (in column D) and what-if prices (in column E) should not be entered for manufactured products
because the product costings of these stock items are determined based on the purchase prices and what-if prices of the
components that have been linked to the manufactured products. If you enter a purchase price or what-if price for a
manufactured stock item, the input will have no effect on the costs that are calculated.

Note: We recommend that you review all bought-in stock items on the StockCode sheet in order to ensure that no
manufactured products are classified as bought-in stock items. If a manufactured product is incorrectly classified as a
bought-in product, it means that no components have been linked to the appropriate product on the BOM sheet. Once you
add the appropriate components to the BOM sheet, the stock code will be automatically be classified as a manufactured
product.

Note: All the stock codes that are created on the StockCode sheet should form part of a continuous cell range otherwise all
the template calculations may not be accurate. No blank rows should therefore be included between any of the rows that
contain a stock code.

Bills of Material

The purpose of the BOM sheet is to create a link between stock components and manufactured products. This is
accomplished by entering the appropriate stock code of the manufactured product in column A and entering the stock code
of the appropriate component in column B. Multiple stock components can be added to a single manufactured product in
order to create a product costing which consists of multiple stock components.

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Excel Skills | Product Costing Template
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Note: Columns A and B both contain list boxes that include all the stock codes that have been created on the StockCode
sheet. You therefore need to create a stock code for each manufactured or component product before you will be able to On
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select the appropriate stock code from the list boxes in these columns. This
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template.
Note: All the columns on the BOM sheet with a yellow column heading require user input. The columns with a light blue
column heading contain formulas that should be copied from one of the existing rows for all the components that are entered
on this sheet.

The following user input is required in the columns with yellow column headings:

Product Stock Code - the stock code of the manufactured product to which the stock component should be added needs to
be selected from the list box in this column. The list box includes all the stock codes that have been created on the
StockCode sheet. The product stock code should be repeated for all the components that are used in the manufacturing
process. For example, if 10 components are required in order to produce a particular manufactured product, you need to add
10 different component stock codes in column B in 10 separate rows and repeat the product stock code in column A in each
of these rows. All 10 component stock codes will then be linked to the same manufactured product and will be included in the
same product costing.

Note: Components are listed on the product costing in the same order in which they appear on the BOM sheet. This means
that even though all components do not need to be grouped together on the BOM sheet (by the product stock code), the
order in which they are entered or sorted will determine the order in which they appear in the costing. We therefore
recommend that you always sort the data on the BOM sheet by the product code in column A and the component code in
column B after making changes to the BOM sheet. By sorting the data, the components will always be listed on the product
costings in a consistent order.

Component Stock Code - a component stock code needs to be selected from the list box in column B for each component
that is used in manufacturing the product which has been selected in column A. The product costings that are produced by
this template accommodate a maximum number of 30 components per manufactured product. The cost of a manufactured
product is calculated based on the costs of all the components that have been linked to the product on the BOM sheet.

Note: A very efficient method of adding components to a manufactured product is by copying the components from a similar
product, selecting the appropriate new product code from the list box in column A and editing the input quantities and yields
of all the components. This method will however only be efficient if components have previously been added to a similar
manufactured product on the BOM sheet.

Input Quantity - the input quantity of the stock component that is used in the manufacturing process should be entered in
column C. This quantity should be entered in the same unit of measure that is specified for the particular stock code on the
StockCode sheet (the component UOM is listed in column I).

Note: The unit of measure (UOM) of the manufactured product is listed in column G. If the unit of measure of the
manufactured product is "Units", the input quantity of the component should be sufficient in order to produce 1 unit of the
manufactured product but if the unit of measure of the manufactured product is for example "Dozen", the input quantity that
is entered should be sufficient in order to produce 12 units of the manufactured product.

Note: The yield basis should also be taken into account when determining the appropriate component input quantity. If the
yield that is entered in column D is based on an Input basis, the component quantity that is added at the beginning of the
manufacturing process should be entered in column C. If however the yield is based on an Output basis, the component
quantity that remains at the end of the manufacturing process should be entered in column C. This is because the input
quantity is divided by the yield as part of the component cost calculation.

Note: You may also want to consider entering a calculation in the input quantity column because this approach may make it
easier to determine how the input quantity has been calculated (if a calculation has been necessary). For example: if the
component unit of measure is dozen and only one unit is used in the manufactured product, the component quantity is
calculated by dividing 1 dozen by twelve. You therefore have the option of entering 0.083333 as the input quantity or you can
enter the formula "=1/12" in the input quantity column.

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Excel Skills | Product Costing Template
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Yield - the component yield should be entered in column D as a percentage. The input quantity that is entered in column C is
divided by the yield in column D in order to determine the component quantity that is required in order to produce the On
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manufactured product. Yields can be determined on an Input or an Output basis - the difference between the two bases is This
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best explained by a definition and a few examples. on
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Definition: The inherent nature of a manufacturing process may result in the component quantity at the end of the
manufacturing process being less than the component quantity that is introduced at the start of the manufacturing process.
The quantity difference can be described as a yield loss. The Input basis refers to the component quantity that is introduced
at the start of the manufacturing process, while the Output basis refers to the component quantity which remains after the
manufacturing process has been completed.

Note: If there is a significant yield loss during the manufacturing process and the incorrect yield basis is used to determine
the yield that is entered in column D, the product costing of the manufactured product may be inaccurate. As we've
mentioned before, the yield basis also affects the input quantity that needs to be entered. It is therefore important to take the
yield basis into account when determining the component input quantity that needs to be entered in column C.

Example: If we use minced meat in the manufacturing of a beef burger, we have to decide on a yield basis before we can
determine the appropriate input quantity that should be specified. If our aim is to produce a 400g burger at the end of the
manufacturing process, the quantity is based on the output after manufacturing. We may know that on average 500g of
minced meat is required in order to produce a 400g burger at the end of the manufacturing process - the 500g is therefore
the Input based quantity. The manufacturing yield can therefore be calculated as 400g divided by 500g which is 80%. If we
include a yield of 80% in the product costing, we need to include the output weight (400g) as the input quantity in the costing.
The meat component cost is therefore calculated by dividing the 400g by 80% thereby effectively including 500g of meat in
our beef burger product costing. If we use the Input basis in our product costing, an input quantity of 500g and yield of 100%
should be entered (assuming that there is no meat yield loss prior to the start of the manufacturing process).

Example: Our example beef burger includes one slice of onions. With this component, we are not really concerned about the
output weight because we have already decided that only one slice of onions will be included on our beef burger. The unit of
measure of the onions component is kilogram and we therefore need to calculate the input quantity of this component based
on how many slices are included in a kilogram of onions. The quantity that represents one slice then needs to be entered in
the Input Quantity column. In principle, we are calculating the input quantity based on the Input yield basis and the yield
therefore needs to be entered as 100%. We do however know that after the slicing process is completed, 5% of the onions
that we purchased do not end up as sliced onions and is therefore lost before the start of the manufacturing process. We
also need to take this yield loss into account in order to compile an accurate beef burger product costing. A yield of 95% is
therefore entered even though we used the Input basis in determining the appropriate component input quantity.

The BOM sheet also includes 22 columns with light blue column headings. These columns contain formulas that should be
copied for all the new components that are added to the BOM sheet. The purpose of each of these columns is as follows:

Error Code - the formulas in this column display an error code if there is a problem with the data that has been entered in
any of the user input columns. This column should therefore be blank if all user input has been entered correctly. If any error
codes are reflected in this column, the errors should be investigated and rectified in order to ensure that all template
calculations remain accurate. Refer to the Error Codes section of these instructions for guidance on how to correct the
appropriate user input errors.
Product Description , Product UOM - these columns are included on the BOM sheet to enable users to view the
description of the product codes that are selected in column A and to ensure that the correct unit of measure is used when
entering component input quantities.
Component Description , Component UOM - these columns are included to enable users to view the description of the
component codes that are selected in column B and to ensure that the correct unit of measure is used when entering
component input quantities.
Component Type - this column reflects the type of component that has been selected in column B. If the component type is
"Bought-in", it means that the component is purchased from a supplier. If the component type is "Manufactured", it means
that the component is an intermediate product which needs to be manufactured.
Bought-In Price - if the component is a bought-in stock item, the purchase price of the component that is entered on the
StockCode sheet will be included in this column. If the component is a manufactured stock item, the bought-in price will be nil
and the component cost will be based on the calculations in the intermediate columns.

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Bought-In Cost - the bought-in cost of components is calculated by multiplying the bought-in price of the component by the
input quantity in column C and dividing the result by the yield in column D.
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Intermed Comp Cost - if the component that is selected in column B is a manufactured product, the component cost in this on
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column is determined based on the product cost of the intermediate product which is calculated in column O. Note that the
component cost is calculated as the sum of all the product costs of components that are linked to the intermediate product
on the BOM sheet. If the component is a bought-in product, the intermediate component cost of the product will be nil.
Intermed Prod Cost - the intermediate product costs of components are calculated by multiplying the intermediate
component cost of the component by the input quantity in column C and dividing the result by the yield in column D.
Product Cost - if the component is a bought-in product, the component product cost will be equal to the component bought-
in cost. If the component is an intermediate product, the component cost will be equal to the intermediate product cost. Note
that the product cost of the manufactured product that has been selected in column A will be equal to the sum of all the
component product costs that are calculated for the particular product in this column.
Bought-In WI Price - if the component is a bought-in stock item, the what-if price of the component that is entered on the
StockCode sheet will be included in this column. If the component is a manufactured stock item, the bought-in what-if price
will be nil and the component what-if cost will be based on the calculations in the intermediate columns.
Bought-In WI Cost - the bought-in what-if cost of components is calculated by multiplying the bought-in what-if price of the
component by the input quantity in column C and dividing the result by the yield in column D.
WI I/M Comp Cost - if the component that is selected in column B is a manufactured product, the what-if intermediate
component cost in this column is determined based on the what-if cost of the intermediate product which is calculated in
column T. Note that the what-if component cost is calculated as the sum of all the what-if costs of components that are linked
to the intermediate product on the BOM sheet. If the component is a bought-in product, the what-if intermediate component
cost of the product will be nil.
WI I/M Prod Cost - the what-if intermediate product costs of components are calculated by multiplying the what-if
intermediate component cost of the component by the input quantity in column C and dividing the result by the yield in
column D.
What-If Cost - if the component is a bought-in product, the component what-if cost will be equal to the component bought-in
what-if cost. If the component is an intermediate product, the component cost will be equal to the intermediate what-if cost.
Note that the what-if cost of the manufactured product that has been selected in column A will equal the sum of all the
component what-if costs that are calculated for the particular product in this column.

Level1 Forecast - the stock quantities of all bought-in and intermediate products that are required in order to produce the
forecasted finished product quantities that have been entered on the Forecast sheet are calculated in this column. Note that
only the components that are directly included in the finished product bills of material will reflect quantities in this column.
Level2 Forecast - the stock quantities of all bought-in and intermediate products that are required in order to produce the
Level1 Forecast quantities that have been calculated in the previous column will be included in this column. Note that only
the intermediate product quantities that are included in the previous column will have an effect on the calculations in this
column because bought-in items contain no components.
Level2 Forecast - the stock quantities of all bought-in and intermediate products that are required in order to produce the
Level1 Forecast quantities that have been calculated in the previous column will be included in this column. Note that only
the intermediate product quantities that are included in the previous column will have an effect on the calculations in this
column because bought-in items contain no components.
Level3 Forecast - the stock quantities of all bought-in and intermediate products that are required in order to produce the
Level2 Forecast quantities that have been calculated in the previous column will be included in this column. Note that only
the intermediate product quantities that are included in the previous column will have an effect on the calculations in this
column because bought-in items contain no components.
Level4 Forecast - the stock quantities of all bought-in and intermediate products that are required in order to produce the
Level3 Forecast quantities that have been calculated in the previous column will be included in this column. Note that only
the intermediate product quantities that are included in the previous column will have an effect on the calculations in this
column because bought-in items contain no components.
Level5 Forecast - the stock quantities of all bought-in and intermediate products that are required in order to produce the
Level4 Forecast quantities that have been calculated in the previous column will be included in this column. Note that only
the intermediate product quantities that are included in the previous column will have an effect on the calculations in this
column because bought-in items contain no components.
Level6 Forecast - the stock quantities of all bought-in and intermediate products that are required in order to produce the
Level5 Forecast quantities that have been calculated in the previous column will be included in this column. Note that only
the intermediate product quantities that are included in the previous column will have an effect on the calculations in this
column because bought-in items contain no components.

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Note: All the components that are added to the BOM sheet should form part of a continuous cell range. There should On
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therefore be no blank rows between entries otherwise all the components that are listed on this sheet may not be included in This
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the template calculations. The BOM sheet should be used to create and maintain the links between manufactured products on
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and their components - the Costing sheet should be used in order to review individual product costings.

Labour & Direct Overheads

For the purpose of compiling product costings, stock codes also need to be created for all labour, direct overheads and even
distribution costs that need to be included in the product costings. These stock codes should be seen as cost centre codes
instead of stock codes which are represented by physical stock on hand.

The appropriate labour pay rates or overhead allocation rates should be entered in the Purchase Price column on the
StockCode sheet and the appropriate production times should be entered in the Input Quantity column on the BOM sheet. A
100% yield should be entered for all labour and overhead costs.

Example: A beef burger is manufactured in a kitchen that consists of 3 staff members. The labour rate is $10.00 per hour and
a total of 400 beef burgers are produced during a shift of 8 hours. In order to add the labour component to the beef burger
product costing, we need to create a stock code for labour on the StockCode sheet (in our example data, all labour related
stock codes start with an "LB"), enter a UOM of hours for the stock code, enter the $10 per hour as the purchase price of the
stock code, add the labour component code to the beef burger bill of material on the BOM sheet, calculate the production
time (3 staff members multiplied by 8 hours in a shift and divided by the 400 beef burgers that are produced), enter the
production time as the input quantity of the labour component on the BOM sheet and enter a yield of 100% on the BOM
sheet.

You can create multiple labour stock codes on the StockCode sheet if there are different labour rates for different staff
members. All the applicable labour stock codes then need to be added separately on the BOM sheet. Additional stock codes
do not need to be created if only the production time (input quantity) differs between products because different production
times can be accommodated by entering different input quantities for each product on the BOM sheet. It is only when the
labour pay rates differ that separate stock codes are required.

Example: Direct overheads or distribution costs can also be added to the product costings by creating a stock code for each
type of overhead. We suggest that you compile a monthly forecast of all the appropriate costs, determine the average
number of units that are produced on a monthly basis, calculate the overhead rate by dividing the forecasted monthly
amount by the number of units, create a stock code for the appropriate type of direct overhead cost on the StockCode sheet,
enter a UOM of "Units", enter the overhead rate as the purchase price, add the overhead stock code as a component on the
BOM sheet for all the applicable products and enter an input quantity of 1 and a yield of 100% on the BOM sheet.

Cost Review

The Costing sheet can be used to review individual product costings. All the calculations on this sheet are automated and the
only user input that is required is selecting the appropriate stock code of the manufactured stock item from the list box in cell
A4.

The Costing sheet is compiled from the data that is entered on the StockCode and BOM sheets. The component product
costs and what-if costs are calculated in column O and T on the BOM sheet based on the purchase prices and what-if prices
that are entered in column D and E on the StockCode sheet. The components that are included in the product costing are
based on the components that have been linked to the manufactured product on the BOM sheet and the component input
quantities and yields are also entered on the BOM sheet.

The Costing sheet also includes calculations of the total product cost of the manufactured product (cell H4), the total what-if
cost of the manufactured product (cell J4), the cost variance between the total product cost and the total what-if cost (cell
K4), the product cost of each component (column H), the what-if cost of each component (column J), the component cost
percentage in relation to the total product cost of the manufactured product (column I) and the difference between the
product costs and what-if costs of each component (column K). Refer to the What-If Costs section of these instructions for
more guidance on the what-if cost calculations.

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Note: The Costing sheet can accommodate a maximum number of 30 components per manufactured product. If you
therefore link more than 30 components to a manufactured product on the BOM sheet, all the components will not be On
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included on the product costing and the costing will therefore not be accurate. This
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Note: The total product cost in cell H4 on the Costing sheet is the same as the product cost of the manufactured stock item
that is included in column H on the StockCode sheet. The Costing sheet can therefore be used to view a detailed breakdown
of all the cost components that are included in the product cost of any manufactured stock item.

Note: Bought-in stock items are purchased from suppliers and should therefore not contain any components. As we've
mentioned before, all stock items that are not linked to components on the BOM sheet are classified as bought-in stock
items. If you select a bought-in stock item from the list box in cell A4, no stock components or costs are therefore listed on
the Costing sheet and the stock type in cell C4 is highlighted in orange. If the stock code that you selected is supposed to be
a manufactured stock item, the fact that it is classified as a bought-in stock item means that no components have been linked
to the stock item on the BOM sheet.

Note: If you duplicate a stock component that is already linked to a particular manufactured product on the BOM sheet, the
stock component will be also be duplicated on the product costing and result in an inaccurate product cost calculation. We
have therefore implemented conditional formatting on the Costing sheet in order to highlight all duplicated components in
orange in column I. If an orange cell background is displayed in any cell in column I, the appropriate component needs to be
deleted from the BOM sheet in order to correct the duplication. We recommend sorting the BOM sheet by the product stock
code in column A and the component stock code in column B in order to make it easier to find the duplicate entries.

What-If Costs

The what-if cost features have been added to the template to enable users to measure the effect that component price
fluctuations have on the product costings of manufactured stock items. The component purchase prices that need to be
analysed should be entered in column E on the StockCode sheet. All other what-if cost calculations are updated
automatically.

Note: What-if costs should only be entered for bought-in stock items (items that are purchased from suppliers). If you enter a
what-if cost for a manufactured stock item, the cost will have no effect on the template calculations.

The what-if costs are calculated and included in the what-if costings based on the what-if purchase price that is specified in
column E on the StockCode sheet and the component input quantities and yields that are specified on the BOM sheet (the
same input quantities and yields that are used in the product costings). The what-if component costs are calculated in
column T on the BOM sheet, included in column J on the Costing sheet and the total what-if cost of the manufactured
product that is selected from the list box in cell A4 on the Costing sheet is calculated in cell J4. The component what-if costs
and the total what-if cost of the manufactured stock item are also compared to the appropriate product costs on the Costing
sheet.

As we mentioned before, the what-if cost features can be used to analyse the effect that component price fluctuations have
on product costings. We recommend that you start this cost comparison exercise by copying the purchase prices of all
bought-in stock items from column D on the StockCode sheet to column E on the StockCode sheet. The prices in column E
(the what-if cost column) can then be amended to the what-if purchase prices that you want to analyse. The same procedure
should be followed regardless of whether you want to analyse the effect of a price fluctuation in a single stock component or
all stock components.

All the what-if cost calculations in the template are automatically updated and you can view a comparison of all manufactured
stock items on the StockCode sheet or view a comparison between the what-if cost and the product cost of a single
manufactured stock item by simply selecting the appropriate stock item from the list box in cell A4 on the Costing sheet.

Note: What-if costs have also been included in the margin analysis on the Margins sheet. Refer to the Margins section of
these instructions for guidance on how the profit margins are calculated on this sheet.

Page 9 of 21
Excel Skills | Product Costing Template
Instructions
www.excel-skills.com

Note: If you want to analyse the effect that changes in component input quantities and yields have on the product costings,
you will have to save this template under a different file name, edit the component input quantities and yields on the BOM On
Onthis
thissheet:
sheet:
sheet of the new workbook and then compare the product costs of the manufactured stock items on the StockCode sheets of This
This sheet
sheet includes
includes detailed
detailed instructions
instructions
both workbooks. We also recommend adding a calculation on one of the StockCode sheets that looks up the values in the on
on setting
setting up
up and
and using
using this
this template.
template.
other workbook based on the stock codes in column A - this will enable you to compare the product costings in the two
workbooks on the same sheet.

Quantity Forecast

The Quantity Forecast features that have been added to the template enable users to enter forecast quantities for all the
appropriate manufactured stock items on the Forecast sheet in order to calculate the stock component quantities that are
required in order to produce the specified quantities of manufactured products. These calculations are extremely useful for
requirements planning or stock usage measurement purposes.

Note: Requirements planning refers to the process of calculating the quantities of manufactured stock items that need to be
produced (usually based on sales forecasts) and then calculating the component quantities that will be required in order to
produce the manufactured products. Orders are then placed with the component stock suppliers based on the quantity
requirements that have been calculated.

Note: Component stock usage can be measured in much the same way. Instead of entering the quantities of manufactured
stock items that need to be produced, users enter the quantities of manufactured stock items that have actually been
produced during the period under review. The component quantities that should have been used in order to produce the
specified manufactured stock item quantities are then automatically calculated (based on the product costings) and these
quantities can then be compared to the actual component stock quantities that have been used in order to measure
production efficiency and the accuracy of the input quantities and yields that have been included in the product costings.

Quantity forecasts can be compiled by simply specifying the stock codes of the appropriate manufactured stock items in
column A on the Forecast sheet, copying the formulas in columns B (stock description), column C (stock unit of measure)
and column D (input error codes) for all the rows that contain a stock code in column A and then entering the quantities of
each manufactured stock item on which the forecast should be based in column E.

Note: All the finished goods stock codes that are added to the Forecast sheet should form part of a continuous cell range.
There should therefore be no blank rows between stock codes otherwise all the components that are listed on this sheet may
not be included in the template calculations.

Note: We also recommend entering the forecast date in cell G2 before printing the sheet in order to keep a record of the
manufactured product quantities that have been used in all quantity forecasts because once you replace the quantities on
this sheet with new forecast quantities, there will be no record of the forecast quantities on which the previous forecast has
been based.

Note: Before using the Forecast feature, you should ensure that all your product costings are accurate. If you base the
forecast on inaccurate product costings it may result in the incorrect component quantities being ordered from suppliers or an
inaccurate analysis of production inefficiencies.

The quantity forecast is calculated by applying the finished goods stock item quantities that are specified on the Forecast
sheet to the appropriate components that are entered on the BOM sheet for the particular manufactured stock items. This
calculation is based on the appropriate component input quantity, yield and unit of measure and is included in columns U to Z
on the BOM sheet.

The Level1 Forecast quantities are determined based on the components that are directly included in the finished goods bills
of material. The Level2 Forecast quantities are based on the Level1 Forecast calculations, the Level3 Forecast quantities are
based on the Level2 Forecast quantities and so forth.

Note: The Forecast calculations that have been included in this template therefore incorporate 7 levels of bills of material. If
you need to include more than 7 levels of bills of material, contact our Support function in order to request a customized
version of this template and specify the number of levels that you need to include in your product costings. Note that the
product costing calculations incorporate an unlimited number of bill of material levels - the limit of 7 levels only applies to the
Forecast calculations.

Page 10 of 21
Excel Skills | Product Costing Template
Instructions
www.excel-skills.com

The forecast quantities that are calculated on the BOM sheet are not really that important (only included on the BOM sheet
for calculation purposes). The quantities that are included in column J on the StockCode sheet are a lot more important On
Onthis
thissheet:
sheet:
because they represent the total component quantities that are required in order to produce the finished goods stock This
This sheet
sheet includes
includes detailed
detailed instructions
instructions
quantities that are entered on the Forecast sheet. on
on setting
setting up
up and
and using
using this
this template.
template.

Note: The forecast quantities on the Stock Code sheet include both the bought-in and intermediate quantity forecasts even
though the intermediate products are not ordered from suppliers but manufactured in house. We have included the quantities
for both of these component types because it may be useful to be able to determine the quantities of intermediate
components that need to be produced in order to manufacture the specified quantities of finished good products (as per the
Forecast sheet).

Note: We highly recommend using the Quantity Forecast features to measure actual stock component usage against the
calculated component quantities because this process will highlight discrepancies between the component quantities that are
included in product costings and the component quantities that are actually being used during the production of
manufactured products. Product costings should also be reviewed regularly based on the results of the usage measurement
exercise. Remember that the Quantity Forecast calculations in this template can only be as accurate as the component input
quantities and yields that are included in the product costings.

Margins

The Margins sheet enables users to calculate the gross profit margins of all manufactured stock items based on the product
costings and what-if costings. The only user input that is required is selecting, entering or copying the appropriate stock code
of the finished goods stock item into column A and entering the appropriate selling price in column E. All the other columns
(with a light blue column heading) contain formulas that should be copied for all the rows that contain a stock code in column
A.

Note: The selling prices that are entered in column E should be exclusive of sales tax if the business is registered for sales
tax purposes.

The product cost in column F and the what-if cost in column I are the same as the product cost and what-if cost for the
particular manufactured stock item as calculated on the StockCode sheet. The gross profit amounts in column G and J are
calculated by deducting the product cost or what-if cost from the appropriate selling price in column E. The gross profit
percentages in columns H and K are calculated by dividing the gross profit amounts in column G and J by the appropriate
selling price in column E.

The what-if selling prices in column L are calculated by applying the gross profit percentages in column H to the what-if costs
in column I and therefore calculate what the selling price should be in order to sustain the same level of profitability if the
price fluctuations that are included in the what-if costs come into effect. The selling price increases in column M indicate the
percentage variance between the what-if selling prices in column L and the selling prices that are entered in column E.

Error Codes

The following error codes may result from inaccurate user input on the StockCode, BOM, Forecast and Margins sheets and
will be displayed in the Error Code columns. The heading of the affected input column will also be highlighted in orange:

■ E1 - this error code means that a duplicated stock code has been entered in the appropriate row. The error can be
corrected by simply deleting one of the duplicated entries.

■ E2 - this error code means that the purchase price input in column D on the Stock Code sheet is incorrect. A purchase
price should be entered for all bought-in stock items but is not required for manufactured products. When adding new
manufactured stock items to the StockCode sheet, this error code will be displayed until the appropriate components have
been added to the BOM sheet. The error can be therefore be corrected by adding a purchase price for a bought-in stock
item, adding components to a manufactured stock item or deleting a purchase price that has been specified for a
manufactured product.

■ E3 - this error code means that the what-if price input in column E on the Stock Code sheet is incorrect. A what-if price
should be entered for all bought-in stock items but is not required for manufactured products. When adding new
manufactured stock items to the StockCode sheet, this error code will be displayed until the appropriate components have
been added to the BOM sheet. The error can be therefore be corrected by adding a what-if price for a bought-in stock item,
adding components to a manufactured stock item or deleting a what-if price that has been specified for a manufactured
product.

Page 11 of 21
Excel Skills | Product Costing Template
Instructions
www.excel-skills.com

■ E4 - this error code means that the product stock code that has been specified is invalid. Stock codes must be created on
the StockCode sheet before being used on any of the other sheets and the error can therefore be corrected by simply On
Onthis
thissheet:
sheet:
creating the appropriate stock code on the StockCode sheet. If a stock code has been deleted, this error code will be This
This sheet
sheet includes
includes detailed
detailed instructions
instructions
displayed in all the rows on the other sheets that still refer to the stock code. These entries must be deleted or a valid stock on
on setting
setting up
up and
and using
using this
this template.
template.
code needs to be selected in column A.
■ E5 - this error code means that the component stock code that has been specified is invalid. Stock codes must be created
on the StockCode sheet before being used on any of the other sheets and the error can therefore be corrected by simply
creating the appropriate stock code on the StockCode sheet. If a stock code has been deleted, this error code will be
displayed in all the rows on the BOM sheet that still refer to the stock code. These entries must be deleted or a valid stock
code needs to be selected in column B.

■ E6 - this error code means that a component has been duplicated in the same product costing. Components should only
be included once in any particular product costing and duplications of component codes may result in inaccurate product
costings. This error can be corrected by sorting the data on the BOM sheet in an ascending order based on the product code
in column A and then by the component code in column B before deleting any duplicated entries that may exist.

Note: Input errors may result in inaccurate template calculations and it is therefore imperative that all errors are resolved
before reviewing the product costings, quantity forecasts or profit margins.

Circular Reference Warning

The complex nature of the calculations that have been included in this template requires multiple calculation iterations in
order to complete the calculation cycle. This is only possible in Excel if the iterative calculation setting (which is part of the
default Excel options) has been enabled. We have enabled this setting for the template but unfortunately the setting may be
automatically overridden if a workbook which has this setting deactivated is active in the Excel application when the template
is opened.

If the iterative calculation setting is overridden when opening the template, the user will receive a circular references warning
and some of the product costing calculations will not be updatable. This is nothing more than an inconvenience which can be
resolved by completing any of the following steps:
■ Activate the calculation iteration settings by selecting the main Tools menu, selecting the Options feature from the menu,
opening the Calculations tab and selecting the checkbox next to the "Iterations" label. You can retain the default settings for
the maximum iterations and maximum change settings. You may notice a "Calculate" message in the status bar at the
bottom of the Excel application window but this message will have no effect on the way in which the calculations are updated
in all the other open workbooks.
■ Close all open workbooks before opening the Product Costing template. This will ensure that the iteration setting is
activated automatically and you therefore don't need to complete the manual process as per the previous point.
■ If the above steps prove to be too cumbersome for your liking, e-mail our Support function and request a macro enabled
version of the template to be sent to you. The macro enabled version only includes a single macro which automates the
activation and deactivation of the iteration calculation settings.

■ WARNING: When the iteration setting is activated, Excel will not identify and warn users of any circular references that
may be present in the affected workbooks. If circular references are present in a workbook, the absence of these warnings
may lead to inaccurate calculations in the affected workbook. We therefore recommend that you close all other open
workbooks before opening the Product Costing template; that you do not save any other open workbooks after the iteration
setting has been enabled (or that you resave the workbooks after the iteration setting has been disabled) and that you
disable the iteration setting after using the Product Costing template.
■ NOTE: The iteration calculation settings only affect the Excel 2003 version of the Product Costing template. This setting
does not need to be activated in the Excel 2007 / 2010 version of the template which makes the latter version a lot less
cumbersome to use.

Template Settings

The functionality that has been included in this template uses data validation and named cell ranges in order to validate all
user input and to perform the calculations that form part of this template. Most of the formulas that are used in this template
are based on named cell ranges that include the first 1,000 rows on the appropriate sheets. When the number of entries that
are added to any of these sheets reaches this limit, you will therefore have to extend the default number of rows in order to
include all the entries in the template calculations.

Page 12 of 21
Excel Skills | Product Costing Template
Instructions
www.excel-skills.com

The named cell ranges can be extended by accessing the main Insert menu, selecting Name, and selecting Define in order
to open the Define Name dialog box. The calculations that include the entries on the StockCode, BOM, Forecast and On
Onthis
thissheet:
sheet:
Margins sheets are all based on the "Records" named range. This named cell range includes a default value of 1,000 and This
This sheet
sheet includes
includes detailed
detailed instructions
instructions
you can therefore extend the number of entries that are included in the template calculations by simply entering a new value on
on setting
setting up
up and
and using
using this
this template.
template.
for this named range and clicking the OK button.

The data validation features that are used to validate user input have been implemented in the first 1,000 rows on the
appropriate sheets. Before you reach this limit, you can simply copy one of the blank rows before row 1,000 and paste the
cells in this row into the required number of rows. This action will copy all the data validation features into the target cell
range.

Help & Customization

If you experience any difficulty while using this template and you are not able to find the appropriate guidance in these
instructions, please e-mail us at support@excel-skills.com for assistance. This template has been designed with flexibility in
mind to ensure that it can be used in most business environments. If however you need an Excel based template that is
customized specifically for your business requirements, please e-mail our Support function and provide a brief explanation of
your requirements.

© Copyright

This template remains the intellectual property of www.excel-skills.com and is protected by international copyright laws. Any
publication or distribution of this template outside the scope of the permitted use of the template is expressly prohibited. In
terms of the permitted use of this template, only the distribution of the template to persons within the same organisation as
the registered user or persons outside the organisation who can reasonably be expected to require access to the template
as a direct result of the use of the template by the registered user is allowed. Subsequent distribution of the template by
parties outside of the organisation is however expressly prohibited and represents an infringement of international copyright
laws.

Page 13 of 21
Stock Codes
Set-up
© www.excel-skills.com 627,187.38 717,075.88
Purchase Error What-If Quantity What-if Value
Stock Code Description UOM What-if Price Product Type Product Cost Value Forecast
Price Code Cost Forecast Forecast
1212GHG Garden Shed Units Manufactured 4,130.88 4,725.37 - - -
1212PHP Painted Garden Shed Units Manufactured 4,968.16 5,681.10 - - -
1212THT Tools Shed Units Manufactured 3,621.31 4,138.33 - - -
RM10 Steel Plates M2 140.00 160.00 Bought-In 140.00 160.00 1,722.22 241,111.11 275,555.56
RM25 Door Handle Units 150.00 170.00 Bought-In 150.00 170.00 155.00 23,250.00 26,350.00
RM30 Wood M2 120.00 135.00 Bought-In 120.00 135.00 2,177.78 261,333.33 294,000.00
RM50 1 Inch Screws Bag 30.00 36.00 Bought-In 30.00 36.00 17.22 516.67 620.00
RM55 2 Inch Screws Bag 50.00 62.00 Bought-In 50.00 62.00 536.93 26,846.41 33,289.54
RM60 Glass M2 80.00 90.00 Bought-In 80.00 90.00 188.24 15,058.82 16,941.18
RM70 Filler Bag 60.00
On this sheet:70.00 Bought-In 60.00 70.00 88.89 5,333.33 6,222.22
On this sheet:
RM75 Create
Create unique
Swivel unique stock
stock codes
codes for
for all bought-in
bought-in and
Units
all and manufactured
3.50
manufactured stock
stock items
4.00 items and
and enter the
the stock
Bought-In
enter stock description,
3.50 unit
description, unit ofof4.00 310.00 1,085.00 1,240.00
RM80 measure,
measure, purchase
purchase price
Paint - White price and
and what-if
Drumcost
what-if cost for
for each
each stock
stock item.
220.00 item. The
The columns
columns with
250.00 with aa light
light blue
blue column
Bought-In column heading
220.00 contain
heading contain
250.00 63.16 13,894.74 15,789.47
RM85 formulas
formulas that
that should
Paint - Green should bebe copied
copied forfor all
Drumall new
new stock codes
codes that
stock250.00 that are
are created.
created. These
280.00 These columns
columns
Bought-Ininclude
include calculations
calculations
250.00 of
of the
the
280.00 35.29 8,823.53 9,882.35
product
product cost
cost and
and what-if
what-if cost
cost of
of all
all manufactured
manufactured stock
stock items
items (calculated
(calculated based
based on
on the
the stock
stock components
components that
that are
are added
added
SD18 Door Units Manufactured 313.67 357.00 155.00 - -
to
to the
the "BOM"
"BOM" sheet)
sheet) and
and the
the quantity
quantity forecast
forecast that
that is
is calculated
calculated based
based onon the
the manufactured
manufactured stock stock item
item quantities
quantities that
that are
are
SD20 Window Units entered on the "Forecast"
entered on the "Forecast" sheet. sheet. Manufactured 29.53 33.97 640.00 - -
SD25 Roof Units Manufactured 1,766.67 2,024.44 155.00 - -
SD30 Window Frame Units Manufactured 321.45 368.52 100.00 - -
SD35 Glazed Window Units Manufactured 39.53 46.47 240.00 - -
SD40 Glazed Window Frame Units Manufactured 361.45 418.52 60.00 - -
LB10 Labour - Grade 1 Hours 20.00 25.00 Bought-In 20.00 25.00 1,264.22 25,284.44 31,605.56
LB15 Labour - Grade 2 Hours 30.00 36.00 Bought-In 30.00 36.00 155.00 4,650.00 5,580.00

Page 14 of 21
Bills of Material
Costing Components Set-up
© www.excel-skills.com
Product Stock Component Input Error Component Component Bought-In Bought-In Intermed
Yield Product Description Product UOM Component Description
Code Stock Code Quantity Code UOM Type Price Cost Comp Cost
SD18 RM30 1.000 90.0% Door Units Wood M2 Bought-In 120.00 133.33 -
SD18 RM25 1.000 100.0% Door Units Door Handle Units Bought-In 150.00 150.00 -
SD18 RM50 0.100 90.0% Door Units 1 Inch Screws Bag Bought-In 30.00 3.33 -
SD18 RM75 2.000 100.0% Door Units Swivel Units Bought-In 3.50 7.00 -
SD18 LB10 1.000 100.0% Door Units Labour - Grade 1 Hours Bought-In 20.00 20.00 -
SD20 RM60 0.250 85.0% Window Units Glass M2 Bought-In 80.00 23.53 -
SD20 LB10 0.300 100.0% Window Units Labour - Grade 1 Hours Bought-In 20.00 6.00 -
SD25 RM10 10.000 90.0% Roof Units
Steel Plates On
On this
this sheet:
sheet: M2 Bought-In 140.00 1,555.56 -
SD25 RM30 1.000 90.0% Compile
Roof aa bill
Compile bill of
of material
material ("recipe")
Units for
("recipe") all
all manufactured
forWood manufactured products. M2Start
products. Start by
by selecting
Bought-In the
selecting the appropriate
120.00 product
appropriate product
133.33 -
SD25 RM55 1.000 90.0% stock code
code in
stockRoof in column
column A A and
and then
then select
select2the
Units Inchappropriate
the appropriate
Screws component
component stock
Bagstock code
code in
in column
column B
Bought-In B before
50.00entering
before the
entering55.56
the -
input
input quantity
quantity and
and yield
yield of
of each
each component.
component. The
The columns
columns with
with aa light
light blue
blue column
column heading
heading contain
contain formulas
formulas that
that
SD25 LB10 1.000 90.0% Roof Units Labour - Grade 1 Hours Bought-In 20.00 22.22 -
should
should be be copied
copied forfor all
all new
new components
components that that are
are entered
entered on on this
this sheet.
sheet. The
The bill
bill of
of material
material that
that is
is created
created onon this
this
SD30 SD20 4.000 100.0% Window
sheet
sheet linksFrame
links the
the manufactured Units
manufactured product Windowcode in column A) and
product (stock
(stock code in column A) and Unitsthe components
Manufacturedthat are used
the components that are used - in order to -
in order to 29.53
SD30 RM70 0.500 90.0% manufacture
Window the
manufacture the product
Frame product (stock
(stock codes
codes in
Units column
column B).
inFiller B). All
All components
components that
Bagthat are
are linked
Bought-In
linked to
to aa manufactured
60.00 product
manufactured on
33.33
product on -
SD30 RM30 1.000 80.0% this
this sheet
sheet
Window are
are included
included in
Frame in the
the product
product
Units cost
cost
Wood calculation
calculation of of the
the manufactured
manufactured
M2 product.
Bought-InNote
product. Note that
that you
you can
120.00 can also add
also150.00
add -
SD30 LB10 1.000 100.0%
direct
direct labour
labour
Window
and
Frameand overhead
overhead costscosts to a bill
bill of
Units to a Labourof material
-material
by simply creating
Grade 1 by simply creatingHours
aa unique
unique
Bought-In
stock
stock code
code for
for these
20.00these costs.
costs.
20.00 -
SD35 SD20 1.000 100.0% Glazed Window Units Window Units Manufactured - - 29.53
SD35 LB10 0.500 100.0% Glazed Window Units Labour - Grade 1 Hours Bought-In 20.00 10.00 -
SD40 SD35 4.000 100.0% Glazed Window Frame Units Glazed Window Units Manufactured - - 39.53
SD40 RM70 0.500 90.0% Glazed Window Frame Units Filler Bag Bought-In 60.00 33.33 -
SD40 RM30 1.000 80.0% Glazed Window Frame Units Wood M2 Bought-In 120.00 150.00 -
SD40 LB10 1.000 100.0% Glazed Window Frame Units Labour - Grade 1 Hours Bought-In 20.00 20.00 -
1212GHG SD25 1.000 100.0% Garden Shed Units Roof Units Manufactured - - 1,766.67
1212GHG SD30 2.000 100.0% Garden Shed Units Window Frame Units Manufactured - - 321.45
1212GHG SD18 1.000 100.0% Garden Shed Units Door Units Manufactured - - 313.67
1212GHG RM30 9.000 90.0% Garden Shed Units Wood M2 Bought-In 120.00 1,200.00 -
1212GHG RM55 2.000 85.0% Garden Shed Units 2 Inch Screws Bag Bought-In 50.00 117.65 -
1212GHG LB10 3.000 100.0% Garden Shed Units Labour - Grade 1 Hours Bought-In 20.00 60.00 -
1212GHG LB15 1.000 100.0% Garden Shed Units Labour - Grade 2 Hours Bought-In 30.00 30.00 -
1212PHP SD25 1.000 100.0% Painted Garden Shed Units Roof Units Manufactured - - 1,766.67
1212PHP SD40 2.000 100.0% Painted Garden Shed Units Glazed Window Frame Units Manufactured - - 361.45
1212PHP SD18 1.000 100.0% Painted Garden Shed Units Door Units Manufactured - - 313.67
1212PHP RM30 9.000 90.0% Painted Garden Shed Units Wood M2 Bought-In 120.00 1,200.00 -
1212PHP RM55 2.000 85.0% Painted Garden Shed Units 2 Inch Screws Bag Bought-In 50.00 117.65 -
1212PHP RM80 2.000 95.0% Painted Garden Shed Units Paint - White Drum Bought-In 220.00 463.16 -
1212PHP RM85 1.000 85.0% Painted Garden Shed Units Paint - Green Drum Bought-In 250.00 294.12 -
1212PHP LB10 3.000 100.0% Painted Garden Shed Units Labour - Grade 1 Hours Bought-In 20.00 60.00 -
1212PHP LB15 1.000 100.0% Painted Garden Shed Units Labour - Grade 2 Hours Bought-In 30.00 30.00 -
1212THT SD25 1.000 100.0% Tools Shed Units Roof Units Manufactured - - 1,766.67
1212THT SD18 1.000 100.0% Tools Shed Units Door Units Manufactured - - 313.67

Page 15 of 21
Bills of Material
Costing Components Set-up
© www.excel-skills.com
Product Stock Component Input Error Component Component Bought-In Bought-In Intermed
Yield Product Description Product UOM Component Description
Code Stock Code Quantity Code UOM Type Price Cost Comp Cost
1212THT RM30 10.000 90.0% Tools Shed Units Wood M2 Bought-In 120.00 1,333.33 -
1212THT RM55 2.000 85.0% Tools Shed Units 2 Inch Screws Bag Bought-In 50.00 117.65 -
1212THT LB10 3.000 100.0% Tools Shed Units Labour - Grade 1 Hours Bought-In 20.00 60.00 -
1212THT LB15 1.000 100.0% Tools Shed Units Labour - Grade 2 Hours Bought-In 30.00 30.00 -

Page 16 of 21
Bills of Material
Costing Components Set-up
© www.excel-skills.com
Product Stock Component Intermed Bought-In WI Bought-In WI WI I/M Comp WI I/M Prod What-If Level1 Level2 Level3 Level4 Level5 Level6
Product Cost
Code Stock Code Prod Cost Price Cost Cost Cost Cost Forecast Forecast Forecast Forecast Forecast Forecast
SD18 RM30 - 133.33 135.00 150.00 - - 150.00 - 172.22 - - - -
SD18 RM25 - 150.00 170.00 170.00 - - 170.00 - 155.00 - - - -
SD18 RM50 - 3.33 36.00 4.00 - - 4.00 - 17.22 - - - -
SD18 RM75 - 7.00 4.00 8.00 - - 8.00 - 310.00 - - - -
SD18 LB10 - 20.00 25.00 25.00 - - 25.00 - 155.00 - - - -
SD20 RM60 - 23.53 90.00 26.47 - - 26.47 - - 117.65 70.59 - -
SD20 LB10 - 6.00 25.00 7.50 - - 7.50 - - 120.00 72.00 - -
SD25 RM10 - 1,555.56 160.00 1,777.78 - - 1,777.78 - 1,722.22 - - - -
SD25 RM30 - 133.33 135.00 150.00 - - 150.00 - 172.22 - - - -
SD25 RM55 - 55.56 62.00 68.89 - - 68.89 - 172.22 - - - -
SD25 LB10 - 22.22 25.00 27.78 - - 27.78 - 172.22 - - - -
SD30 SD20 118.12 118.12 - - 33.97 135.88 135.88 - 400.00 - - - -
SD30 RM70 - 33.33 70.00 38.89 - - 38.89 - 55.56 - - - -
SD30 RM30 - 150.00 135.00 168.75 - - 168.75 - 125.00 - - - -
SD30 LB10 - 20.00 25.00 25.00 - - 25.00 - 100.00 - - - -
SD35 SD20 29.53 29.53 - - 33.97 33.97 33.97 - - 240.00 - - -
SD35 LB10 - 10.00 25.00 12.50 - - 12.50 - - 120.00 - - -
SD40 SD35 158.12 158.12 - - 46.47 185.88 185.88 - 240.00 - - - -
SD40 RM70 - 33.33 70.00 38.89 - - 38.89 - 33.33 - - - -
SD40 RM30 - 150.00 135.00 168.75 - - 168.75 - 75.00 - - - -
SD40 LB10 - 20.00 25.00 25.00 - - 25.00 - 60.00 - - - -
1212GHG SD25 1,766.67 1,766.67 - - 2,024.44 2,024.44 2,024.44 50.00 - - - - -
1212GHG SD30 642.90 642.90 - - 368.52 737.04 737.04 100.00 - - - - -
1212GHG SD18 313.67 313.67 - - 357.00 357.00 357.00 50.00 - - - - -
1212GHG RM30 - 1,200.00 135.00 1,350.00 - - 1,350.00 500.00 - - - - -
1212GHG RM55 - 117.65 62.00 145.88 - - 145.88 117.65 - - - - -
1212GHG LB10 - 60.00 25.00 75.00 - - 75.00 150.00 - - - - -
1212GHG LB15 - 30.00 36.00 36.00 - - 36.00 50.00 - - - - -
1212PHP SD25 1,766.67 1,766.67 - - 2,024.44 2,024.44 2,024.44 30.00 - - - - -
1212PHP SD40 722.90 722.90 - - 418.52 837.04 837.04 60.00 - - - - -
1212PHP SD18 313.67 313.67 - - 357.00 357.00 357.00 30.00 - - - - -
1212PHP RM30 - 1,200.00 135.00 1,350.00 - - 1,350.00 300.00 - - - - -
1212PHP RM55 - 117.65 62.00 145.88 - - 145.88 70.59 - - - - -
1212PHP RM80 - 463.16 250.00 526.32 - - 526.32 63.16 - - - - -
1212PHP RM85 - 294.12 280.00 329.41 - - 329.41 35.29 - - - - -
1212PHP LB10 - 60.00 25.00 75.00 - - 75.00 90.00 - - - - -
1212PHP LB15 - 30.00 36.00 36.00 - - 36.00 30.00 - - - - -
1212THT SD25 1,766.67 1,766.67 - - 2,024.44 2,024.44 2,024.44 75.00 - - - - -
1212THT SD18 313.67 313.67 - - 357.00 357.00 357.00 75.00 - - - - -

Page 17 of 21
Bills of Material
Costing Components Set-up
© www.excel-skills.com
Product Stock Component Intermed Bought-In WI Bought-In WI WI I/M Comp WI I/M Prod What-If Level1 Level2 Level3 Level4 Level5 Level6
Product Cost
Code Stock Code Prod Cost Price Cost Cost Cost Cost Forecast Forecast Forecast Forecast Forecast Forecast
1212THT RM30 - 1,333.33 135.00 1,500.00 - - 1,500.00 833.33 - - - - -
1212THT RM55 - 117.65 62.00 145.88 - - 145.88 176.47 - - - - -
1212THT LB10 - 60.00 25.00 75.00 - - 75.00 225.00 - - - - -
1212THT LB15 - 30.00 36.00 36.00 - - 36.00 75.00 - - - - -

Page 18 of 21
Product Costing

Stock Code Description Type Total Cost What-If Cost Variance

1212PHP Painted Garden Shed Manufactured 4,968.16 5,681.10 14.4%
© www.excel-skills.com
Product Component Input % Cost
Stock Code Description UOM Yield Product Cost Component % What-If Cost
Type Cost Quantity Variance
SD25 Roof Units Manufactured 1,766.67 1.000 100.0% 1,766.67 35.6% 2,024.44 14.6%
SD40 Glazed Window Frame Units Manufactured 361.45 2.000 100.0% 722.90 14.6% 837.04 15.8%
SD18 Door Units Manufactured 313.67 1.000 100.0% 313.67 6.3% 357.00 13.8%
RM30 Wood M2 Bought-In 120.00 9.000 90.0% 1,200.00 24.2% 1,350.00 12.5%
RM55 2 Inch Screws Bag Bought-In 50.00 2.000 85.0% 117.65 2.4% 145.88 24.0%
RM80 Paint - White Drum Bought-In 220.00 2.000 95.0% 463.16 9.3% 526.32 13.6%
RM85 Paint - Green Drum Bought-In 250.00 1.000 85.0% 294.12 5.9% 329.41 12.0%
LB10 Labour - Grade 1 Hours Bought-In 20.00 3.000 100.0% 60.00 1.2% 75.00 25.0%
LB15 Labour - Grade 2 Hours Bought-In 30.00 1.000 100.0% 30.00 0.6% 36.00 20.0%

On
Onthis
thissheet:
sheet:
The
The product
product costing
costing calculations
calculations on
on this
this sheet
sheet enable
enable users
users to to view
view aa detailed
detailed costing
costing for
for any
any
manufactured
manufactured product.
product. The
The sheet
sheet requires
requires nono user
user input
input –– all
all the
the cost
cost components
components are are automatically
automatically
calculated
calculated based
based on
on the
the stock
stock code
code that
that is
is selected
selected from
from the
the list
list box
box in
in cell
cell A4.
A4. The
The calculations
calculations on
on
this
this sheet
sheet can
can also
also be
be used
used to
to analyze
analyze the
the effect
effect that
that component
component price price increases
increases have
have on
on an
an
individual
individual product
product costings
costings by
by comparing
comparing the the product
product cost
cost andand what-if
what-if cost
cost of
of aa manufactured
manufactured
product.
product.

Page 19 of 21
Production Forecast
Production Quantity Forecast Date Prepared: 4/12/2019
© www.excel-skills.com
Stock Code Description UOM Error Code Quantity
1212GHG Garden Shed Units 50.00
1212PHP Painted Garden Shed Units 30.00
1212THT Tools Shed Units 75.00

On
On this
this sheet:
sheet:
The
The production
production forecast
forecast can
can be
be used
used toto determine
determine the
the stock
stock component
component
quantities
quantities that
that are
are required
required in
in order
order toto produce
produce the
the manufactured
manufactured stock
stock
quantities
quantities that
that are
are entered
entered on
on this
this sheet.
sheet. Simply
Simply enter
enter the
the appropriate
appropriate
manufactured
manufactured stockstock quantities
quantities and
and the
the component
component stock
stock quantities
quantities are
are
calculated
calculated andand displayed
displayed in
in column
column JJ onon the
the "StockCode"
"StockCode" sheet.
sheet. The
The columns
columns
with
with light
light blue
blue column
column headings
headings contain
contain formulas
formulas that
that should
should bebe copied
copied for
for all
all
new products that are entered on this
new products that are entered on this sheet.sheet.

Page 20 of 21
Margin Analysis
Finished Products
© www.excel-skills.com
Error Selling Product Gross Profit What-If What-If Gross What-If Selling Selling Price
Stock Code Description UOM Gross Profit What-If GP %
Code Price Cost % Cost Profit Price Variance
1212GHG Garden Shed Units 5,500.00 4,130.88 1,369.12 24.9% 4,725.37 774.63 14.1% 6,291.52 14.4%
1212PHP Painted Garden Shed Units 6,000.00 4,968.16 1,031.84 17.2% 5,681.10 318.90 5.3% 6,861.01 14.4%
1212THT Tools Shed Units 4,500.00 3,621.31 878.69 19.5% 4,138.33 361.67 8.0% 5,142.46 14.3%

On
On this
this sheet:
sheet:
The
The calculations
calculations on on this
this sheet
sheet enable
enable users
users toto calculate
calculate the the actual
actual gross
gross profit
profit percentage
percentage of of all
all
manufactured
manufactured products
products based
based on on the
the selling
selling price
price that
that isis entered
entered in
in column
column E. E. User
User input
input isis limited
limited
to
to selecting
selecting thethe appropriate
appropriate stockstock code
code and
and entering
entering thethe appropriate
appropriate selling
selling price
price –– all
all the
the columns
columns
with
with aa light
light blue
blue column
column heading
heading contain
contain formulas
formulas thatthat should
should be
be copied
copied forfor all
all the
the new
new stock
stock
codes
codes that
that are
are added
added to to this
this sheet.
sheet. AA calculation
calculation ofof the
the what-if
what-if gross
gross profit
profit is
is also
also included
included and and the
the
what-if
what-if selling
selling price
price is
is calculated
calculated byby applying
applying thethe actual
actual gross
gross profit
profit percentage
percentage to to the
the what-if
what-if cost.
cost.

Page 21 of 21