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               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

                        beer and making great profits. Profitability
 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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