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 have 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 0.59 units of Maker’s Mark 750ml, but actually consumed 2 units, leaving us with a variance of -1.41 units.
By multiplying the variance by the cost per unit, we get a Variance Cost of $-63.36. This is the value of the variance at cost. Since it is a negative number, it represents a loss.
WISK then calculates the Variance Retail, which in this example is $-214.05.
The full formula for Variance Retail is:
Variance Retail = Sales - (Consumption Cost * Sales / Sales Cost)
In other words, the variance cost of $-63.36 represents $214.05 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.
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:
1. Place your cursor over your username on the bottom left and click “Venue Settings”
2. Scroll down on the Venue Settings window and click the checkbox beside “Price Retail” to toggle it on.
3. 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:
1. Click into the “Retail Price” column (you may need to toggle it on under under “Columns” if you don’t see it)
2. Type the retail price of the item (the approximate value that the item will sell for when used in menu items)
3. 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.