The Change
In order to ensure the Theoretical COS calculation at each site is correct, the Theoretical COS calculation will use the Site specific Cost Price of the Purchase Product that is set as the Preferred Purchase Product at the Enterprise level.
Release Date: 28Aug2013
Reason for the Change
Paid for development request.Customers Affected
Spirit; franchised pubs only. Though initially deployed for Spirit it could be applied to other customers.Release Notes
This new calculation is carried out if the ‘Apply Product Banding to Organisation’ global setting is enabled [see article: Release Note: Product Banding CAD File (34232)].
The Spirit Franchise Theoretical COS calculation for each Product for each Site will identify the Enterprise level Preferred Purchase Product, and look up the Site specific Cost Price for that Purchase Product. The Site specific Cost Price for the Purchase Product will then be used to derive the Unit Cost Price for the Theoretical Cost of Sale calculation.
If there is no Site specific Cost Price for the identified Purchase Product, the Theoretical Cost of Sales calculation will fall back and use the Enterprise level Cost Price for the Purchase Product.
Calculation Details

For each Product, the value used to calculate a Products Theoretical Cost of Sales will be determined by its Cost Model:
 Preferred
 Highest
 Lowest
 Average
 Where Site specific Purchase Product Cost Prices exist, they will be used when determining the cost of the Products value for the Theoretical Cost of Sales calculation.
Preferred Cost Model
 The Purchase Product used to derive the Unit Cost Price used in the Theoretical Cost of Sales calculation for a Product, for each Site, will be the Enterprise level Preferred Purchase Product.
 The Unit Cost Price used within Theoretical Cost of Sales calculation, will be derived from the Preferred Purchase Products Site specific Cost Price, where a Site specific Cost Price exists.
 Where a Site specific Cost Price does not exist, the Unit Cost Price used within Theoretical Cost of Sales calculation for the Product, for the Site will be derived from the Preferred Purchase Products Enterprise level Cost Price.
Highest Cost Model
 Where at least one Site specific Cost Price exist for a Site, for at least one Purchase Product, the Site specific Cost Price will be used to derive the Unit Cost Price the Theoretical Cost of Sales will be calculated with.
 Where no Site specific Cost Prices exist for a Site, the Enterprise level Cost Prices will be used to derive the Unit Cost Price the Theoretical Cost of Sales will be calculated with.

The Products’ highest valued Unit Cost Price will be determined through calculating the cost of each active purchase product, when reconciled back to be in terms of the Product’s Unit Size. For example:
 Product = Draught 1
 Product Unit Size = 1 Gal
Highest  Purchase Product Size  Cost Price  Cost Price per 1 Gal 

1 x 11 Gal  64.00  5.82  
*  1 x 22 Gal  129.00  5.86 
 The Unit Cost Price used to calculate the Theoretical Cost of Sales for each Site, for each Product, will be the highest valued Unit Cost Price.
Lowest Cost Model
 Where at least one Site specific Cost Price exist for a Site, for at least one Purchase Product, the Site specific Cost Price will be used to derive the Unit Cost Price the Theoretical Cost of Sales will be calculated with.
 Where no Site specific Cost Prices exist for a Site, the Enterprise level Cost Prices will be used to derive the Unit Cost Price the Theoretical Cost of Sales will be calculated with.

The Products’ lowest valued Unit Cost Price will be determined through calculating the cost of each purchase product, when reconciled back to be in terms of the Product’s Unit Size. For example:
 Product = Draught 1
 Product Unit Size = 1 Gal
Lowest  Purchase Product Size  Cost Price  Cost Price per 1 Gal 

*  1 x 11 Gal  64.00  5.82 
1 x 22 Gal  129.00  5.86 
 The Unit Cost Price used to calculate the Theoretical Cost of Sales for each Site, for each Product, will be the lowest valued Unit Cost Price.
Average Cost Model
 Where at least one Site specific Cost Price exist for a Site, for at least one Purchase Product, the Site specific Cost Price will be used to derive the Unit Cost Price the Theoretical Cost of Sales will be calculated with.
 Where no Site specific Cost Prices exist for a Site, the Enterprise level Cost Prices will be used to derive the Unit Cost Price the Theoretical Cost of Sales will be calculated with.

The Products’ Average Unit Cost Price will be determined through calculating the cost of each purchase product and dividing it by the number of potential supplier relationships, when reconciled back to be in terms of the Product’s Unit Size. For example:
 Product = Draught 1

Product Unit Size = 1 Gal
Purchase Product Size  Cost Price  Cost Price per 1 Gal 

1 x 11 Gal  64.00  5.82 
1 x 22 Gal  129.00  5.86 
 Average Cost Price per 1 Gal = £5.84
 The Unit Cost Price used to calculate the Theoretical Cost of Sales for each Site, for each Product, will be the Average Unit Cost Price
Reports Affected
Management Figures
 Path: Stock Management tab > Management Figures > Summary (returned when the Stock Period is Closed or Approved)
 The Unit level Theoretical Cost of Sales returned on the Stock Management Figures Summary Tab, will be the sum of the Theoretical Cost of Sales of each Product sold by the Unit, within the Stock Period Start and End Dates.
Actual vs. Theoretical GP
 Path: Reporting > Published Reports >Stock Management
 The Theoretical Cost of Sales for the Cost Centre, returned within the Actual versus Theoretical GP Report, will be the sum of the Theoretical Cost of Sales of each Product sold by the Unit under the Cost Centre, for all the Closed/Approved Stock Periods, within the Date Range selected.
Accounting Figures
 Path: Stock Management tab > Management Figures > Accounting Figures
 The Theoretical Cost of Sales for the Cost Centre and/or Categories, returned within the Actual versus Theoretical GP Report, will be the sum of the Theoretical Cost of Sales of each Product sold by the Unit under the Cost Centre and/or Category, within the Stock Period Start and End Dates.
Stock Reconciliation
 Path: Stock Management tab > Button available if the stock period is closed
 Path: Management Figures Page > Stock Reconciliation Button
 The ‘Diff Cost’ column will return the cost of the difference, deriving the Cost Price from the Site specific cost price.
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