Cost Driver Analysis May 2026

She continued. "Take labor costs. You pay your packers by the hour, Silas. We discovered our packing cost driver was —switching from one bag size to another. Each changeover cost us 22 minutes of idle time. We redesigned our line so that we pack all the 12-ounce bags, then all the 5-pound bags. Labor cost per unit dropped 18%."

Gas consumption vs. Batch size optimization. A smooth, efficient curve. "We analyzed our activity. We found that 60% of our gas was used in the warm-up and cool-down phases, not the roasting itself. So the true cost driver was setup time . We now batch all small test roasts into one day. We use a smaller sample roaster for trials. We schedule large production runs back-to-back to eliminate cool-downs." cost driver analysis

Gas consumption vs. Hours of roaster operation. The line was jagged and inefficient. "Silas, your head roaster, Giacomo, fires up the big 50-kilo drum roaster for every batch—even for a 5-kilo test batch of a new single-origin. That’s like using a freight train to deliver a letter. Your cost driver isn't 'pounds roasted.' It's 'number of batches, regardless of size.' " She continued

He scheduled packaging in dedicated time blocks: Monday for 12oz bags, Tuesday for 5lb bags. We discovered our packing cost driver was —switching

She put up a simple chart comparing the two roasters. "Our revenue is similar," she began. "But Silas’s cost per roasted pound is $12.50. Ours is $9.15."

Across the river, Elena, the CEO of Aurora Beans, faced the same market. But while Silas saw a blur, Elena saw a series of levers. She practiced cost driver analysis .