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Inventory

Inventory Variance Calculator

My pour cost is high. Is it pricing, over-pouring, or theft?

Theoretical cost is what your recipes say you should have used. Actual usage is what the count says you did use. The difference is over-pouring, spillage, comps you did not ring in, breakage, or theft, and it has a dollar value.

Your figures stay here. The calculator runs on this device; the share link stores its numbers after the # in the URL.
Worked answer$3,715.00See it ↓
01

Your numbers

A worked example is already loaded. Replace any field with the figures from the source named beside it.

Opening inventory valuePrevious count sheet
$21,400.00

Cost value of everything on the shelf at the start of the period.

Purchases during the periodInvoices
$18,900.00

Everything received during the period at cost.

Closing inventory valueThis period's count sheet
$20,100.00

Cost value of everything on the shelf at the end of the period.

Sales for the periodPOS period report
$78,500.00

Net sales of the products you counted, excluding sales tax.

Theoretical costRecipe costing or POS theoretical report
21%

What your recipes and prices say cost should be, as a percentage of sales. Your POS may report this directly if your recipes are loaded.

Days in this periodYour reporting period
30 days

The number of days covered by all five figures above. This is used only to annualize the variance.

02

The answer

Variance

$3,715.00

actual cost 25.7% against theoretical 21%

  • Actual usage$20,200
  • Theoretical usage$16,485
  • Actual cost of sales25.7%
  • Variance as % of sales4.7%
  • Variance as % of theoretical usage22.5%
  • Annualized variance at this rateThis 30-day variance scaled to 365 days. It is a pace, not a forecast.$45,199
Product worth $3,715 left the building without being sold at the price your recipes assume. Over-pouring, unrung comps, breakage, and theft all land here.
03 Show the arithmetic
Actual usage = opening inventory + purchases − closing inventory
Theoretical usage = sales × theoretical cost %
Variance = actual usage − theoretical usage
Actual cost % = actual usage ÷ sales × 100
Annualized variance = period variance × (365 ÷ days in period)
04 What the answer leaves out
  • Count the same items in the same way each period. Most surprising variances are counting errors, not theft.
  • Open bottles need a consistent method, whether that is tenths, weighing, or a measuring stick. Changing method mid-year makes the trend meaningless.
Continue if it helps

The number is the start of the decision.

story Read the ten-minute closeoutTurn a vague shift recap into five observations that can actually change the next service.
Same operating area
01 Par Level & Reorder CalculatorHow much to keep on the shelf, and how much to order today. 02 Inventory Turnover CalculatorHow many times your inventory sells through, and how much cash it holds.