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Variance Retail
When an item has a variance, WISK calculates the Variance Cost by multiplying the cost per unit by the variance amount. This value is then used to calculate the Variance Retail, which is what the variance would've theoretically sold for in your venue.
The Variance Retail is an approximation based on your POS Item mapping and the weighted average of the sales for the defined period.
In the example below, we sold 9.86 units of Grey Goose 750ml, but actually consumed 12 units, leaving us with a variance of -2.14 units.
By multiplying the variance (-2.14) by the cost per unit at the time of the inventory ($35) we get a Variance Cost of $-74.76. This is the value of the variance at cost. Since it is a negative number, it represents a loss.
Note: The variance in units is rounded to 2 decimal places. The calculation for Variance Cost uses the unrounded value. If you multiply the rounded value by the cost per unit you will see a small difference in the Variance Cost ($-74.76 unrounded compared to -$74.90 rounded)
WISK then calculates the Variance Retail, which in this example is $-244.76.
The full formula for Variance Retail is:
Variance Retail = Sold ($) - (Cost of Goods Sold ($)* Sold ($) / Theoretical Cost of Goods Sold ($))
In other words, the variance cost of $-74.76 represents $244.76 in potential lost revenue.
Note: If there are no sales for the defined period, WISK uses the average from the last 30 days. If there are no sales at all, see “Retail Price” below.
Variance Retail Formula Breakdown
To get the Variance Retail we use a number of data points. This section breaks each one down and how we calculate the Variance Retail.
Sold ($)
Cost of Goods Sold ($)
Theoretical Cost of Goods Sold ($)
Note: Each of these values can be toggled on as columns on the Variance page.
Sold ($) - This represents the sales associated to that item. POS Items can have multiple ingredients/items, so when calculating the sales for a specific items it looks at the percentage of the total cost it represents, and applies that percentage to the menu price.
For Grey Goose it is sold in 5 POS Items.
The Sales ($) shows the total sales for the POS Item, but then other calculations determine how much of that sale is attributed to the specific ingredient. The total sales for those 5 POS Items in this period is $1585, but not all of that counts towards Grey Goose. In this example, Grey Goose is not the only ingredient in the Cosmopolitan.
When we click the "Details" button to view the Cosmopolitan we see that the Grey Goose makes up 78.95% of the total cost of the item. In other words, when the POS Item is sold for $10, ~$7.985 is attributed to the Grey Goose.
With that in mind, we can calculate the total Sold ($) for Grey Goose specifically:
Cosmopolitan Sales = $320 * 78.95% = ~$252.64
Double Vodka Sales = $231.00 *100% = ~$231.00
Long Island Iced Tea Sales = $384.00 *22.25% = ~$85.44
Single Vodka Sales = $308 * 100% = ~$308.00
White Russian Sales = $342.00 * 73.84% = ~$252.5328
Note: All of these dollar values are rounded to some degree. In this example they add up to ~$1129.51. The value the system shows makes all calculations without rounding.
The final Sold ($) from the system is $1130.20
Cost of Goods Sold ($) - The dollar value of an item's consumption. It's the amount of an item consumed, multiplied by the Cost per unit. The Grey Goose had consumption of 12 units, with a unit price of $35.
12 * 35 = $420.00
Theoretical Cost of Goods Sold ($) - The dollar value of Sold (units). This is what was mapped to POS Items. It's what the COGS should be if you sold exactly was was mapped without variance. The Grey Goose sold 9.86 units, with a unit price of $35.
9.86 * 35 = ~345.24 (this is based on the sales in units being unrounded.)
Now putting it all together, as a reminder the Variance Retail formula is:
Variance Retail = Sold ($) - (Cost of Goods Sold ($)* Sold ($) / Theoretical Cost of Goods Sold ($))
Putting in the numbers:
1130.20 - (420 * 1130.20 / 345.24) = ~ -244.74 (The $0.02 difference can be attributed to rounding)
Retail Price
In certain venue configurations, you may see situations where you have consumption for an item, but it isn’t mapped to any POS Items. As a result, the “Variance Retail” cannot be calculated.
To get around this, you can assign a Retail Price to an item manually. The Retail Price is an approximation of what a full unit of that item would sell for at your venue.
For example, if your venue is hosting an open bar event and will bill the client based on usage/consumption. Specific drinks aren’t being entered in the POS, and all you have at the end of the event is the consumption of each item.
In order to determine the retail value of the consumption to know what to charge the client, you can assign a Retail Price to the affected items.
In this example below, we consumed 1.5 units of Aperol 750ml, but it isn’t currently mapped to any POS Items. To get the Variance Retail, we need to assign a Retail Price.
Note: Before you can add a Retail Price, the feature needs to be enabled in your venue.
Enabling Retail Price
To enable a manual retail price:
Place your cursor over your username on the bottom left and click “Venue Settings”
Scroll down on the Venue Settings window and click the checkbox beside “Price Retail” to toggle it on
The “Retail Price” field now appears on your items.
Adding a Retail Price
You can add a retail price to an item on the Items or Variance pages.
To add a retail price:
Click into the “Retail Price” column (you may need to toggle it on under under “Columns” if you don’t see it)
Type the retail price of the item (the approximate value that the item will sell for when used in menu items)
After entering the Retail Price, the “Variance Retail” is calculated by multiplying the consumption and Retail Price together. In this example, the 1.5 units of Aperol 750ml that were consumed with a Retail price of $125 equals a Variance Retail of $187.50
