How to Compare Planned vs Actual Cost in MRPeasy
MRPeasy planned vs actual manufacturing cost
Also searched as
- MRPeasy manufacturing order cost variance
- how to see actual cost of a manufacturing order in MRPeasy
- MRPeasy product cost wrong
- MRPeasy margin report cost of goods
Short answer
MRPeasy builds a planned cost from the bill of materials, routing and rates, then records actual cost as materials are consumed and work is reported on the manufacturing order. To find a variance, compare the two on the order itself and then drill into material price, quantity used, and time booked.
Applies to: MRPeasy cloud edition, manufacturing orders with BOM and routing; menu names can differ slightly between plans and releases
How to review planned vs actual cost for an order
- 1Open the manufacturing order from the Manufacturing module and note its product, quantity and status. Cost comparisons are only reliable once the order is finished or nearly so.
- 2Review the planned materials and planned operations on the order; these come from the product BOM and routing at the time the order was created.
- 3Check actual material consumption lines: compare quantities booked against planned, and look for extra issues, scrap or substitutions.
- 4Compare the unit cost of the stock lots consumed with the planned item cost; purchase price changes between planning and receipt are a frequent driver.
- 5Review reported time on each operation against planned setup and run time, and confirm the work centre and employee rates used.
- 6Check any overhead or other cost settings applied to the order, since an overhead percentage can distort a product cost that looks otherwise correct.
- 7Open the finished goods lot and read its resulting unit cost, then compare it with the product master cost used for quoting.
- 8If you adjust anything, correct the source (BOM, routing, rate) so future orders plan correctly, rather than only editing this order.
Where planned cost comes from
A manufacturing order inherits its plan from the product at creation time: the bill of materials gives the planned quantity of each material, the routing gives the operations with planned time, and the item and work centre records give the prices and hourly rates. Because the plan is copied onto the order, later edits to the BOM do not rewrite orders that already exist.
That copy behaviour explains a classic confusion. If you fixed a BOM yesterday and today's old order still shows the old plan, nothing is broken. The order simply carries the snapshot taken when it was released, and you must decide whether to edit that order or recreate it.
Where actual cost comes from
Actual cost accumulates from what really happened. Materials contribute the cost of the specific stock lots consumed, so a purchase received at a higher price flows into the order cost when that lot is used. Labour contributes booked time multiplied by the applicable rate, and operations may carry machine or overhead rates on top.
The common variance sources are therefore few: material price (the lot cost differs from plan), material usage (more or less consumed than the BOM says), time (operators booked more or less than the routing), and rate changes. Reviewing them in that order resolves most questions in minutes.
Why the product cost looks wrong
A product cost that seems off is usually a data problem upstream. Check for BOM lines with a zero or missing cost, items whose cost was never updated after a price change, a routing with unrealistic times left from an early estimate, or a unit-of-measure mismatch such as buying in boxes and consuming in pieces.
Also test for scrap. If the BOM assumes no loss but the shop regularly loses ten percent of a material, actual material usage will exceed plan on every order. The honest fix is to put an expected scrap factor into the BOM instead of explaining the variance each month.
Variance worksheet per order: Material price variance = (actual lot cost - planned item cost) x actual qty Material usage variance = (actual qty - planned qty) x planned item cost Labour time variance = (actual hours - planned hours) x planned rate Labour rate variance = (actual rate - planned rate) x actual hours
Making the numbers trustworthy
Costing is only as good as the discipline that feeds it. Operators must book time and report quantities as they work, and stock receipts must carry the true landed price. A few weeks of clean data lets you spot genuine patterns, such as one product that always runs over on a given operation.
Know the limits too. MRPeasy gives solid operational costing for small manufacturers, but if you need standard cost accounting with formal variance postings to a ledger, you will likely pair it with accounting software and decide there how variances are recorded.
Common pitfalls
- !Editing a BOM and expecting existing manufacturing orders to update their plan automatically.
- !Leaving item costs at zero or at an old price, which makes both planned cost and margin meaningless.
- !Mixing units of measure between purchase and consumption without a proper conversion factor.
- !Judging a variance on an unfinished order, when materials or time have not all been booked yet.
- !Not adding expected scrap to the BOM, so every order shows the same recurring usage variance.
How an ERP-grounded AI assistant handles this
Variance questions are repetitive reading across orders, lots and rates, which suits an assistant grounded in your MRPeasy data. ERPray can rank the orders with the largest overrun, split each into price, usage and time effects, and show the underlying query. Any change to a BOM or rate stays with a person who approves it.
Frequently asked questions
Why does my finished order cost differ from the product cost?
The product cost is a planning figure based on current BOM, routing and rates, while the order cost reflects what was consumed and booked. Differences come from material lot prices, extra usage, time booked versus routing, and any overhead applied.
Will changing the BOM fix an order that is already open?
Generally no. The order keeps the plan it was created with, so you either edit the order lines directly or create a new order from the corrected BOM. Fix the BOM anyway so every future order plans correctly.
How do I find which material caused a cost overrun?
List the order's material lines, compare planned and actual quantity and the cost of the lots consumed, and sort by the difference. Usually one or two lines explain most of the overrun.
Is MRPeasy costing enough for audit-grade standard costing?
It is built for operational costing in small manufacturing. If your auditors expect formal standard costs and posted variances, plan to handle that in your accounting system and check requirements with your accountant.
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