Manufacturing order costs

Odoo Manufacturing automatically calculates the cost of each manufacturing order, and the average production cost of a product, based on its bill of materials (BoM) and completed orders. This helps businesses track true product profitability.

MO cost versus real cost

The MO cost is the estimated cost based on the BoM’s components and operations. The real cost is what the order actually costs, which can differ if an operation takes longer than expected, more components are used than specified, or component prices change.

How costs are configured

• Component cost is calculated automatically from the average purchase price across purchase orders, shown in the Cost field on the component’s product form. It can be entered manually, but a future purchase order resets it to the computed value.
• Work centre cost is set on the work centre’s General Information tab: Cost per hour (per workcenter) for running the equipment, and per employee for staff time, used to calculate the estimated MO cost.
• Employee cost is set in the Employees app, on an employee’s Settings tab, in Hourly Cost. This figure is used for the real cost instead of the work centre’s per-employee estimate.

How to configure a BoM for accurate costing

1. Go to Manufacturing app > Products > Bills of Materials and open or create a BoM.
2. On the Components tab, add each component and its Quantity.
3. On the Operations tab, add each operation with its Work Center and Default Duration (or set Duration Computation to calculate it from past work orders).

Viewing MO and average costs

Open a manufacturing order and click its Overview smart button to see the MO Cost and Real Cost broken down by component and operation. Both match before work starts, may diverge during production, and match again once the order is completed.