How the cost of ingredients and products is calculated

# How the cost of ingredients and products is calculated

Add supplies of the ingredients and products in stock, and Poster will automatically calculate the cost of the dishes and beverages.

### How the cost of ingredients and products is calculated

The cost of ingredients and products is based on supplies and calculated by the average cost method

💡 The cost of ingredients and products is calculated by the formula:

total price of the ingredients in stock / count of the products in stock.

For example, there were two supplies of oranges with different amount and cost: 10 kg for \$3 and 5 kg for \$5. So the cost will be:

(10 kg × \$3 + 5 kg × \$5) / (10 kg + 5 kg) = \$3,67 for 1 kg of oranges.

### How the cost of dishes and preparations if calculated

The cost of dishes and preparations consists of the total cost of their ingredients.

For example, Poster will calculate the cost of the Avocado Caprese dish as a sum of the cost of the components of the dish:

\$1,20 + \$0,85 + \$0,10 + \$0,01 + \$0,01 + \$0,04 + \$0,01 = \$2,22

☝️ The cost of manufactured dishes and preparations is the sum of the cost of their ingredients in stock at the time of manufacture.

### How the cost of products that are not in stock is calculated

If you haven’t supplied products, their number in stock will become negative after the sale. The cost of such items will be shown as zero in Inventory → Stock

The cost of products and ingredients in dishes and preparations will be calculated according to the latest average cost when these products were in stock. This cost will be counted in sales of dishes with ingredients with negative stock.

Once missing ingredients are supplied, the cost of stock and closed receipts will change to the cost of this delivery.

The ingredient cost is averaged from the last full inventory check to the next inventory check of your stock. If you don't want the ingredient cost to be averaged, run an inventory check.