Page 7 - Beverage Master_JuneJuly 2021

Finance

The ABC’s of Beer Costs

By: Kary Shumway, Craft Brewery Financial Training
B rewery success depends on making great • How to Implement a Simple Product Costing

system.
beer and making great profits. Profitability
Waukesha
2085/10 depends on knowing what the beer costs. Know Your Costs
Craft breweries are small manufacturers.
Centrifugal Pump In the finance world, to properly account for the
costs of a brewery, we need to use manufacturing As businesspeople, we constantly strive to get
accounting. No need to be an accountant, just need better prices on the things we buy for our business:
to learn a few commonsense concepts. cans, bottles, carriers, mother cartons, etc. If there
This article will give you grounding in the ABCs of is an opportunity to save 5% or 10% without sacri-
your product costs so that you can make great prof- ficing quality or service, we jump on it. That’s just
its to go along with the great beer. good business.

The ABCs of Product Costing The process of Product Costing is similar; however,
we widen the lens and focus on every cost that goes
• Know your costs: Why it’s important. into your beer.
• The Building Blocks: Direct Material, Direct
Labor, Overhead. When you know all the costs, you begin to under-

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