eGrow Costing Overview

eGrow Connect offers two general approaches to costing:

1.  Real Time Cost Tracking Tool available as an add-on module
2. Manual Costing

This article will detail how each of these approaches work to help you decide which approach is best in-line with your method of costing.

Cost Tracking by Space Rental Approach

This method is available with the Real Time Plant Costing Add-on Module.

In this method, nursery growing space is rented to plants. It is an overall approach, so costs are not calculated at the time of any Inventory, sale or purchase transaction. Costs are shown LIVE based on transactions and other input parameters. Learn more about how the Real Time Plant Costing module works.

Parameters Used

• Total Production Areas (Growing Space)
• Return on Investment (ROI) percent on Capital Investments
• Depreciation Amount
• Operational Costs
• Origin Costs (If buying in and propagating in-house, for example: Seed, cuttings, etc.)
• Container or Pot Cost
• Soil Cost
• Space used by Plant
• Plant Loss Percent
• Time on the ground (Residency)

Manual Costing

In this method, eGrow uses manually entered cost values to calculate and re-calculate other costs each time a transaction is completed on a crop. There are three main cost measures used: Growing Cost, Average Cost, and Crop Cost. Read on to see these costs defined further.

Growing Cost

Growing cost, sometimes referred to as standard cost, is the cost of producing an item. This cost is entered for each item size in the Item Sizes Library. Adjustments to growing costs are logged and can be viewed using the cost adjustment history report. Growing cost changes are recorded in the Transaction Log.

Growing Cost is used by eGrow in the following ways:

1. when inventory is added using a Plant transaction
2. when inventory is added using a Shift transaction
3. when inventory is added using Assemblies (Advanced Invntory Control Add-on Module Only)

Average Cost

Average cost, also referred to as Weighted Average Cost or Moving Average Cost, is the cost of transferring plants from one product to another, like when sizing up. In eGrow, average cost is associated with an item size and is updated when on hand quantity for a given item size is increased, whether manually or through a transaction like Plant, Purchase, or Shift. Average cost is only re-calculated if On Hand Qty > 0. Average cost can also be manually updated. Changes to average cost are logged and can be viewed using the cost adjustment history report.

Here are the equations used to recalculate Average Cost when each transaction occurs.

Plant or Purchase Transactions

$$Average Cost = \cfrac{(On Hand Qty * Average Cost) + (Purchase Qty * Purchase Price)}{(On Hand Qty + Purchase Qty)}$$

Shift Transaction

$$Average Cost = \cfrac{(Shift To On Hand Qty * Average Cost) + (Shift To New Qty * Shift To Growing Cost)}{(Shift To On Hand Qty +Shift To New Qty)}$$

Assemblies

$$Average Cost = \cfrac{(Assembly To On Hand Qty * Average Cost) + (Assembly New Qty * Assembly Total Cost)}{(Assembly To On Hand Qty +Assembly New Qty)}$$

Crop Cost

Crop Cost is an aggregate cost for items of the same size, location, and ready date.