Actual/Theoretical Cost Report - Why is Theoretical Off?

The Actual/Theoretical Cost report is used to review and evaluate the actual and theoretical costs for products associated with the “Cost of Goods Sold” P&L. The Actual cost is the value of the inventory the location has used over the posted periods viewed in the report. The Theoretical cost is associated with the cost of the items and recipe components sold. This data comes from the POS system or reconciled commissary and customer orders.

There are various reasons why the Theoretical could be off in the A/T Cost Report. The solution outline below will help to guide you through a checklist of items to see why your reporting could be inaccurate.

Check to ensure that the Recipe Components, Conversions, and Production Type and POS Decrement are accurate.

• If any adjustments need to be made to the components, to have these changes trickle down into the current Post Period and its Reports, Menu Mix will need to be undone and re-imported after the adjustments are made.
• If any adjustments need to be made to the components, to have these changes trickle down into the current Post Period and its Reports, Menu Mix will need to be undone and re-imported after the adjustments are made.
• Production Type and POS Decrement are key to how the Actual Theoretical Report reports cost. See the Net-Chef Helps "Recipe Depletion & Costing Matrix"

Check if a wrong Menu Mix file was imported with incorrect data.

• Unlike Sales Mix files, which will overwrite one another, Menu Mix files will only add to one another. The bad Menu Mix file must be undone and re-imported with the corrected data.

Check for any days when a Menu Mix file was not imported within the current period.

• Import missing days and review the report data.

Check the Bid Sheet to ensure the Vendor Product Conversions are set up correctly. These locations could be counted using an incorrect unit.

• Change the inventory unit, but first, check if all locations count the same way. If this is the case, the value of inventories will not be changed, but the theoretical value will now be calculated correctly.

If the Product has the "Set Theoretical Equal to Actual" box checked, the Theoretical is based on Inventory depletion, not depletion from Menu Mix files.

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Actual/Theoretical Cost Report - Why is Actual Off?

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