A 10-pound bag of soy wax, a $28 bottle of fragrance, and a box of wicks become 20 candles — but you pour three tests, you wick one wrong and re-pour, and you give two away at the craft fair. The ledger shows the wax bag as an expense and the 15 sold candles as revenue, and the shrinkage and the giveaway never appear as cost.
Batch Costing, Not Monthly Costing
Each pour is a batch with a lot number. For a 20-candle batch, 8-oz:
- Wax: 10 lb at $3.20 = $32.00
- Fragrance: 8 oz at $1.75 = $14.00
- Wicks, jars, labels: 20 × $1.10 = $22.00
- Labor: 1.8 hours at $22 loaded = $39.60
- Overhead: Burning tests and re-pours, $9.00
Total: $116.60 / 20 = $5.83 per candle. Test pours (3 candles) are not free — they are part of batch cost at $17.49, booked as product development or as part of COGS, not as zero.
Book the pour: Dr Inventory — Raw Wax at purchase, Dr WIP / Cr Inventory at use, Dr Finished Goods / Cr WIP at yield at $5.83 per unit.
Shrinkage From Testing and Giveaways
Giveaways are not marketing expense alone — they are inventory at cost transferred to marketing expense: Dr Marketing — Samples $5.83 / Cr Inventory $5.83. That keeps COGS for sold units correct.
Testing shrinkage: The 3-candle test that you burn to validate wick choice is Dr Product Development $17.49 / Cr Inventory $17.49 if you re-classify, or simply part of batch cost with a higher per-unit. Track the choice consistently.
Pricing Above the Craft-Fair Discount
A $24 candle priced at a $5 craft-fair discount is $19, with $5.83 cost and $13.17 contribution vs. $18.17 at $24. A 20% discount costs 28% of contribution. Book discounts as Dr Sales Discounts / Cr Revenue, not as a lower revenue, so the discount rate is visible.
Keep Your Finances Organized From Day One
Wax, fragrance, and wicks are COGS by batch, not by month, and the discount that moves units at a craft fair is a cost you can see.
Beancount.io keeps each batch as a WIP transaction with lot and cost, version-controlled and recall-ready. Get started for free and make the next pour priced before it is wicked.