diff --git a/src/tests/test_compute_plans.py b/src/tests/test_compute_plans.py
new file mode 100644
index 0000000..0317229
--- /dev/null
+++ b/src/tests/test_compute_plans.py
@@ -0,0 +1,199 @@
+from unittest.mock import Mock
+
+import pytest
+
+from servala.core.models import (
+    ComputePlan,
+    ComputePlanAssignment,
+    ServiceInstance,
+)
+
+
+@pytest.mark.django_db
+def test_create_compute_plan():
+    plan = ComputePlan.objects.create(
+        name="Small",
+        description="Small resource plan",
+        memory_requests="512Mi",
+        memory_limits="1Gi",
+        cpu_requests="100m",
+        cpu_limits="500m",
+        is_active=True,
+    )
+
+    assert plan.name == "Small"
+    assert plan.memory_requests == "512Mi"
+    assert plan.memory_limits == "1Gi"
+    assert plan.cpu_requests == "100m"
+    assert plan.cpu_limits == "500m"
+    assert plan.is_active is True
+
+
+@pytest.mark.django_db
+def test_compute_plan_str():
+    plan = ComputePlan.objects.create(
+        name="Medium",
+        memory_requests="1Gi",
+        memory_limits="2Gi",
+        cpu_requests="500m",
+        cpu_limits="1000m",
+    )
+    assert str(plan) == "Medium"
+
+
+@pytest.mark.django_db
+def test_get_resource_summary():
+    plan = ComputePlan.objects.create(
+        name="Large",
+        memory_requests="2Gi",
+        memory_limits="4Gi",
+        cpu_requests="1000m",
+        cpu_limits="2000m",
+    )
+    summary = plan.get_resource_summary()
+    assert summary == "2000m vCPU, 4Gi RAM"
+
+
+def test_apply_compute_plan_to_spec():
+    compute_plan = Mock()
+    compute_plan.memory_requests = "512Mi"
+    compute_plan.memory_limits = "1Gi"
+    compute_plan.cpu_requests = "100m"
+    compute_plan.cpu_limits = "500m"
+
+    compute_plan_assignment = Mock()
+    compute_plan_assignment.compute_plan = compute_plan
+    compute_plan_assignment.sla = "besteffort"
+
+    spec_data = {"parameters": {}}
+
+    result = ServiceInstance._apply_compute_plan_to_spec(
+        spec_data, compute_plan_assignment
+    )
+
+    assert result["parameters"]["size"]["memory"] == "1Gi"
+    assert result["parameters"]["size"]["cpu"] == "500m"
+    assert result["parameters"]["size"]["requests"]["memory"] == "512Mi"
+    assert result["parameters"]["size"]["requests"]["cpu"] == "100m"
+
+    assert result["parameters"]["service"]["serviceLevel"] == "besteffort"
+
+
+def test_apply_compute_plan_preserves_existing_spec():
+    compute_plan = Mock()
+    compute_plan.memory_requests = "512Mi"
+    compute_plan.memory_limits = "1Gi"
+    compute_plan.cpu_requests = "100m"
+    compute_plan.cpu_limits = "500m"
+
+    compute_plan_assignment = Mock()
+    compute_plan_assignment.compute_plan = compute_plan
+    compute_plan_assignment.sla = "guaranteed"
+
+    spec_data = {
+        "parameters": {
+            "custom_field": "custom_value",
+            "service": {"existingField": "value"},
+        }
+    }
+
+    result = ServiceInstance._apply_compute_plan_to_spec(
+        spec_data, compute_plan_assignment
+    )
+
+    assert result["parameters"]["custom_field"] == "custom_value"
+    assert result["parameters"]["service"]["existingField"] == "value"
+
+    assert result["parameters"]["size"]["memory"] == "1Gi"
+    assert result["parameters"]["service"]["serviceLevel"] == "guaranteed"
+
+
+def test_apply_compute_plan_with_none():
+    spec_data = {"parameters": {}}
+    result = ServiceInstance._apply_compute_plan_to_spec(spec_data, None)
+
+    assert result == spec_data
+
+
+def test_build_billing_annotations_complete():
+    compute_plan_assignment = Mock()
+    compute_plan_assignment.odoo_product_id = "test-product-123"
+    compute_plan_assignment.odoo_unit_id = "test-unit-hour"
+
+    control_plane = Mock()
+    control_plane.storage_plan_odoo_product_id = "storage-product-id"
+    control_plane.storage_plan_odoo_unit_id = "storage-unit-id"
+
+    annotations = ServiceInstance._build_billing_annotations(
+        compute_plan_assignment, control_plane
+    )
+
+    assert annotations["servala.com/erp_product_id_resource"] == "test-product-123"
+    assert annotations["servala.com/erp_unit_id_resource"] == "test-unit-hour"
+
+    assert annotations["servala.com/erp_product_id_storage"] == "storage-product-id"
+    assert annotations["servala.com/erp_unit_id_storage"] == "storage-unit-id"
+
+
+def test_build_billing_annotations_no_compute_plan():
+    control_plane = Mock()
+    control_plane.storage_plan_odoo_product_id = "storage-product-id"
+    control_plane.storage_plan_odoo_unit_id = "storage-unit-id"
+
+    annotations = ServiceInstance._build_billing_annotations(None, control_plane)
+
+    assert "servala.com/erp_product_id_resource" not in annotations
+    assert "servala.com/erp_unit_id_resource" not in annotations
+    assert annotations["servala.com/erp_product_id_storage"] == "storage-product-id"
+    assert annotations["servala.com/erp_unit_id_storage"] == "storage-unit-id"
+
+
+def test_build_billing_annotations_no_storage_plan():
+    compute_plan_assignment = Mock()
+    compute_plan_assignment.odoo_product_id = "product-id"
+    compute_plan_assignment.odoo_unit_id = "unit-id"
+
+    control_plane = Mock()
+    control_plane.storage_plan_odoo_product_id = None
+    control_plane.storage_plan_odoo_unit_id = None
+
+    annotations = ServiceInstance._build_billing_annotations(
+        compute_plan_assignment, control_plane
+    )
+
+    assert annotations["servala.com/erp_product_id_resource"] == "product-id"
+    assert annotations["servala.com/erp_unit_id_resource"] == "unit-id"
+    assert "servala.com/erp_product_id_storage" not in annotations
+    assert "servala.com/erp_unit_id_storage" not in annotations
+
+
+def test_build_billing_annotations_empty():
+    control_plane = Mock()
+    control_plane.storage_plan_odoo_product_id = None
+    control_plane.storage_plan_odoo_unit_id = None
+
+    annotations = ServiceInstance._build_billing_annotations(None, control_plane)
+
+    assert annotations == {}
+
+
+@pytest.mark.django_db
+def test_hour_unit():
+    choices = dict(ComputePlanAssignment.BILLING_UNIT_CHOICES)
+    assert "hour" in choices
+    assert str(choices["hour"]) == "Hour"
+
+
+@pytest.mark.django_db
+def test_all_billing_units():
+    choices = dict(ComputePlanAssignment.BILLING_UNIT_CHOICES)
+
+    assert "hour" in choices
+    assert "day" in choices
+    assert "month" in choices
+    assert "year" in choices
+
+    assert str(choices["hour"]) == "Hour"
+    assert str(choices["day"]) == "Day"
+    assert "Month" in str(choices["month"])
+    assert str(choices["year"]) == "Year"