A production order authorizes making a set quantity of one product, and it carries the bill of materials (BOM) that the store issues to the line. Type the product and order quantity into the production order template above and the required quantity of each material is calculated; after the run you record what was actually issued and compare actual cost with standard cost. A production plan with start and end dates and a daily production report that tracks cost variances sit in the next two tabs.
Required material = quantity per unit × order quantity, and cost variance = actual − standard. In the example, an order for 200 tubs of sauce has a standard cost of SAR 1,546.80 and an actual cost of SAR 1,598.35, a variance of SAR 51.55.
How to use the production order template
- Pick the document name (production order, work order or manufacturing order), then type the product and order quantity into the document itself.
- Fill in the bill of materials: each material with its unit and the quantity needed for one unit of product. The quantity for the whole order appears beside it.
- After the run, enter what was actually issued of each material; advanced mode adds unit cost, the quantity actually produced and run stages.
- Download the order as a PDF for planning, the production supervisor and the storekeeper to sign, or in Word to change its wording.
What is a production order or manufacturing order?
A production order is written approval to make one batch: one product, one quantity, one due date, with its materials worked out in advance. The same document goes by three names: "work order" in factories and workshops, "manufacturing order" in cost accounting, and "production order" in central kitchens and food lines. Its job is to tie every kilo that leaves the store to a known batch, so batch cost comes from the materials actually used rather than a rough estimate.
Parts of a production order and how to fill it in
The production order template opens with the product, order quantity and date, then the bill of materials, then run stages in advanced mode, then cost and signatures. In the central kitchen example each tub needs 1.6 kg of tomato puree, so an order for 200 tubs requires 320 kg. The store issued 330 kg, so tomatoes alone add 10 kg × SAR 3.50 = SAR 35.00 of the SAR 51.55 variance. The line produced 197 of the 200 tubs (98.5%), so material cost per tub produced is SAR 8.11.
Production plan and order scheduling
The production plan lists upcoming orders: product, line, quantity, daily capacity and start date. Quantity comes from confirmed orders minus finished stock on hand, then it is spread across lines by capacity. Run days = quantity ÷ capacity, rounded up, so 1,200 pieces of pizza dough at 400 a day take 3 days. Review the plan weekly: multiply each order by its bill of materials, compare the total with store balances, and raise purchase orders for any shortfall before the start date.
Linking production to inventory and cost
Each order reduces raw material stock by what was actually issued and adds finished goods by the quantity produced (197 tubs, not 200). Production cost is read daily in the report: standard cost = good output × standard unit cost. In the example 1,866 of 1,920 planned units were produced (97.2%), and actual cost was SAR 4,035.23 against SAR 3,919.70 standard, a variance of SAR 115.53. Pizza dough carried most of it (SAR 81.63). Tracked by hand, you copy these figures to item cards and the cost ledger yourself; an accounting system that holds inventory and finance together records the issue once.
Common production order mistakes
- Ignoring scrap: a batch that lost 4 pieces is not full output, and the gap belongs in the waste column.
- Issuing materials to the line in one batch without an order number, so nobody knows which order consumed them.
- Keeping a bill of materials that was not updated after a recipe or supplier change.
- Calculating standard cost on planned quantity instead of actual output, which hides the effect of waste.
When orders multiply and materials branch out
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Production order FAQ
What is the difference between a production order and a purchase order?
A production order is internal: it tells the line to make a quantity from materials you already hold. A purchase order is external: it asks a supplier to sell you materials or goods at a price and date. The weekly plan shows when a purchase order is needed to cover a material shortfall.
What is the difference between a production order and a production plan?
A production order covers one batch of one product, with its quantity, materials and signatures. A production plan is a schedule that arranges several orders across lines and days over a week or a month.
How do I calculate batch cost on a production order?
Multiply what was actually issued of each material by its unit cost, add them up, and divide by the quantity produced. In the example SAR 1,598.35 ÷ 197 tubs = SAR 8.11 per tub. That is material cost only, before labour and overheads.
Should I record scrap on a production order?
Yes. Enter what actually left the store and only the good quantity produced. The gap is scrap: it shows in the difference and cost variance columns, and in the daily report's waste column and waste rate.
Does this template work for central kitchens?
Yes. The default example is a central kitchen making sauces, dough and baked goods, with quantities in kilograms, litres and pieces, and fractions are accepted.