Have you ever wondered exactly WHAT your annual expense for home detergents really is? I did it.

I decided to start producing my home detergents, after two courses I attended at Uopeople: “Introduction to biology” and “Introduction to environmental sciences”, see the explanation in another article, here.

This recipe was personally tested.

Water: 5 lt

Organic soap 250/300g.

Baking soda: 2 spoons.

Essential oils:10 drops as you like (lavender, tea tree, lemongrass or peppermint).

Boil water -grate the soap- pour the grated soap into the water- mix- add the baking soda- let it rest a few hours, even one night- then mix with a blender. Ready. Store in dedicated containers.

Use: drop directly into the detergent unit of your washing machine – you may even add a small amount into the basket.

You can use it to wash clothes, both washing machine and hand washing and you can wash floors. In the second case, fill a bucket with hot water, drop 2 tablespoons of the home detergent you made, add 2 tablespoons of ethyl alcohol and a few drops of essential oils as you like. These detergents have a huge cleansing power, particularly when floors are greasy; you get even better results by using microfiber cloths.

Calculations for costs

	Alternative 1make detergents	Alternative 2buy detergents *	Differential Amount	Alternative 1 is:
Variable costs
Cost to buy from outside	0	211,92	211,92	lower
Direct materials	€10,32	0	€10,32	higher
Direct labor	0	0		–
Manufacturing overhead	0	0		–
Fixed costs	0	0		–
Total production costs	€10,32	211,92	201,6	lower

*Note that I didn’t write values in the labor costs, because it takes less than half an hour to produce it (totally).

Cost to buy from outside *Data from the Italian National Statistical Institute. € 17,66 is the average monthly expense for a family.

17,66*12= 211,92

Direct materials. A Soap bar costs € 0,70. 70*12 (months)= 8,40

Baking Soda 1 pack each year € 1,80 ( kg. 1)

Water. (Tap water). It costs € 0,002 each liter. 5 liters per month are= 0,01 each month and 0,01*12 are 0,12 each year.

Thus=

Soap € 8,40

Baking Soda € 1,80

Water € 0,12

Total €10,32

The Homemade detergent is suitable for clothes (hand-washing machines), floors, and other purposes like cleaning some surfaces. It is not suitable for dishwashing. In this case, we should compare our expenses, with the same detergents and get another table.

	Alternative 1make detergents	Alternative 2buy detergents *	Differential Amount	Alternative 1 is:
Variable costs
Cost to buy from outside	0	131,93		lower
Direct materials	€10,32	0	€10,32	higher
Direct labor	0	0		0
Manufacturing overhead	0	0		0
Fixed costs	0	0		0
Total production costs	€10,32	131,93	121,61	lower

Detergent for clothes (washing machine). 5 liters cost €5,89 (lasts 1 month).

Detergent for floors. 1-liter costs € 3,65 (lasts 1 month).

Detergents for general surfaces (kitchen counter, light fixtures). 1-liter costs € 1,39

5,89+3,65+1,39= €10,93

€10,93 *12= 131,93

Here we can discuss the origin of data. In the first case, they are general data from the Italian National Statistical Institute, in the second case, they are data from direct prices of detergents I have found on the web.

About the tables. In the first case, you save €201,6, in the second case, you save €121,61, but the first amount is more general and it includes other detergents like dishwashers or softeners.

My idea is that, in each case, the difference and the amount we save is important and it’s worth it making other attempts with further detergents, (for glasses, dishes, or dishwashers).

Special thanks to teacher  Allman, from the “Managerial Accounting” course of University of the People. 

Sources:

University of the People, course of Managerial Accounting. Heisinger, K. & Hoyle, J. (2012), Managerial Accounting. Chapter 7. Creative Commons license. Available at: http://2012books.lardbucket.org/books/managerial-accounting-v1.0/

[October 8th, 2014]

Italian National Statistical Institute . Available at: http://dati.istat.it/Index.aspx?DataSetCode=DCCV_SPEMMFAM [October 28th, 2014]