The real cost of a batch you only know next week

In a lot of small factories, the cost of a batch is known only after it has already shipped, once the raw-material bills are in and someone has sat down to add them up.

By then the price is set, the goods are gone, and if the margin was thin, you find out too late to do anything about it. The problem is not the maths. It is the gap between when the cost is real and when you see it.

Why costing runs late

Raw-material rates move daily. A batch made on Monday and one made on Thursday can cost meaningfully different amounts, but if costing is done at month-end from a stack of purchase bills, both get the same rough number. The result is an average that is right for nobody and a margin that is a guess until it is history.

Cost the batch as it is made

The fix is to feed the day’s raw-material rates into costing as batches are produced, so the real margin shows on every batch while it still matters. A bad-margin run is caught the same day, not at the next stock-take, and pricing decisions rest on real numbers instead of a memory of what things used to cost.

None of this asks you to change how you make anything. It moves the cost of a batch from something you reconstruct later to something you can see the moment it is made.