Costing that includes the whole bill of materials, and production planning that reflects the capacity you actually have.
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Manufacturers usually know their material cost and rarely know their loaded cost. Labour minutes, overhead absorption and the fasteners buried two levels down in a sub-assembly are the difference between a product that looks profitable and one that is. Most of our work here is building the cost up in layers so that when margin moves you can see which layer moved.
The four engagements that come up most often
The columns that carry the argument
| A | B | C | D | E | F | G |
|---|---|---|---|---|---|---|
| 1 | SKU | Material | Labour | Overhead | Unit cost | Margin |
| 2 | CHAIR-01 | 35.45 | 12.80 | 8.60 | 56.85 | 55.9% |
| 3 | TABLE-02 | 88.10 | 21.40 | 14.30 | 123.80 | 57.2% |
| 4 | STOOL-04 | 18.60 | 6.40 | 4.30 | 29.30 | 57.5% |
| 5 | SHELF-03 | 22.90 | 7.20 | 4.80 | 34.90 | 49.4% |
Why each one is written the way it is
=SUMPRODUCT((BOM[Parent]=[@SKU])*BOM[Qty]*BOM[UnitCost])
Material cost from the bill of materials rather than a remembered figure, so a supplier price change updates every product that uses the part.
=TotalOverhead/TotalDirectHours*[@Minutes]/60
Overhead absorbed on direct labour hours. Spreading it evenly per unit makes a two-minute product carry the same overhead as a two-hour one, which distorts every pricing decision after it.
=[@Qty]/[@Yield]
Material consumed including scrap. A 95% yield means you consume 1.053 units for every one that ships; ignoring it understates cost on every line.
=MIN(AvailableHours/[@MinutesPerUnit]*60, MaterialOnHand/[@QtyPerUnit])
Producible quantity, constrained by whichever runs out first — capacity or material. Planning against one constraint alone is how schedules slip.
A worked case from this sector
A furniture maker priced a chair from the cost of its four visible parts. Expanding the bill of materials to two levels added the welding kit, fasteners and packaging held inside sub-assemblies — about 9% of the sale price, on every unit, invisible in the costing sheet. The list price did not change. The discount authority did, and so did which products the sales team was encouraged to push.
Free, and adaptable to your own data
Specific to this work, not generic
Four comfortably, which covers most light assembly. Deeper trees work but need one roll-up step per level; past four or five, an MRP system is the honest recommendation and we will say so.
Per direct labour hour in almost every case. Per-unit allocation charges a quick product the same overhead as a slow one and quietly cross-subsidises the wrong lines.
Where the ERP exports, yes — Power Query consumes a scheduled extract and rebuilds the costing on refresh. Where there is an API we use it. Either is a small automation project.