You made 48 candles from one 20-pound bag of soy wax, 16 ounces of fragrance at $28, and 48 wicks. You sold 30, you have 18 on the shelf, and you expensed the whole bag of wax in March because it was easier. Your March COGS is overstated, your April COGS is understated, and the lot number that could have isolated a recall is not in the ledger at all.
Batch Costing by Lot, Not by Month
Candle and soap production is batch manufacturing. Each batch has a lot number, a yield, and a cost.
Example batch — 48 × 8-oz soy candles, lot 2026-0812-A:
- Wax: 20 lb at $3.20/lb = $64.00
- Fragrance: 16 oz at $1.75/oz = $28.00
- Wicks and jars: 48 × $1.10 = $52.80
- Labor: 2.5 hours at $22 loaded = $55.00
- Allocated overhead: Burn testing, cleaning, and label printing, $18.00
Total batch cost: $217.80 / 48 = $4.54 per candle. Not $3.64 if you ignored labor, not $5.80 if you expensed the wax as a period cost.
Book it:
Dr Inventory — Raw Waxat purchaseDr WIP — Batch 2026-0812-A/Cr Inventory — Raw Waxwhen wax moves to productionDr Inventory — Finished Goods — Lot 2026-0812-A/Cr WIPat yield, at $4.54 per unit quantityDr COGS/Cr Inventory — Finished Goodsat sale, per unit, by lot
The Recall Ledger
The Consumer Product Safety Act requires that a recalled batch be traceable to the customer. The lot number is that trace.
Keep a lot-to-customer map: Batch 2026-0812-A, 48 units, 30 sold to wholesale customer B on invoice 1041, 18 on shelf. If the fragrance lot is later found to irritate, you can pull the 30, not the entire year's production.
Keep Your Finances Organized From Day One
Wax, fragrance, and lot numbers are COGS before they are craft.
Beancount.io keeps each batch as a WIP transaction with lot, quantity, and cost, version-controlled and recall-ready. Get started for free and make the next batch a lot you can trace, not a month you must explain.