Actual/Theoretical Cost Report - Why is Actual 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 items and recipe components sold. This data comes from the POS system or reconciled commissary and customer orders.

There are multiple reasons that your Actual Cost in the A/T report may be off. Below is a list of potential causes and how to remedy them.

Inventory Counts

 If inventory counts from the previously posted period are incorrect,

• Then, An Inventory Adjustment can be used to address the problem. The beginning counts cannot be changed. 

 If Inventory Counts for the current post period are not correct.

• Then, Fix the counts and re-review the Physical Inventory.

If the current count is entered for the wrong product,

• Then, Enter the correct product counts and re-review the Physical Inventory.

Conversions 

If Alternate count units have the wrong conversion.

• Then, Enter the counts in inventory units (do not enter counts in the alternate units) and re-review the Physical Inventory. After the period is posted, fix the conversions on the alternate units.

If a Vendor Order was reconciled with the wrong conversion.

• Then, Re-reconcile the Vendor Order using catch-weight. By doing this, issues with values and/or menu mix may need to be addressed. Once these are verified and corrected, then re-review the Physical Inventory.

Order Reconciliation

If the Vendor order is not reconciled.

• Then, reconcile the vendor order with the current post period and re-review the physical inventory.

If the vendor order is not reconciled correctly (catch-weight),

• Then, Reconcile the vendor order correctly. Remember that afterward, you may have issues with value and/or menu mix that must be addressed/reprocessed. Then, re-review the Physical Inventory.

If the vendor order is reconciled with the wrong conversion,

• Then, Re-reconcile the Vendor Order using catch-weight. By doing this, issues with values and/or menu mix may need to be addressed. Once these are verified and corrected, then re-review the Physical Inventory.

If Purchase By Invoice is reconciled for the wrong amount.

• Then, edit the transaction and re-review the physical inventory.

If Purchase By Invoice is reconciled into the wrong period,

• Then, Edit the invoice and re-review the Physical Inventory.

Transfers

If the Incoming location transfer is not reconciled.

• Then, Reconcile the transfer into the current post period and re-review the Physical Inventory.

If the Outgoing location transfer is not reconciled.

• Then, have the receiving location reconcile the transfer into the current post period and review the Physical Inventory.

Production / Daily Prep

If Production is not finalized.

• Then, finalize all production runs associated with plans in the current Post Period and re-review the Physical Inventory.

If Production is finalized for incorrect quantities/batch.

• Then, address with an inventory adjustment and then re-review the Physical Inventory.

If the production recipe has an incorrect quantity of components for the batch,

• Then, adjust the Value and/or Inventory. Then, re-review the Physical Inventory.

Location Products

If the Product value is incorrect.

• Then, adjust the value and re-review the Physical Inventory. 

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