Cost Control and the Menu—Determining Selling Prices and Product Mix. Controlling Foodservice Costs. 4. OH 4- 1. Chapter Learning Objectives. Determine a selling price based on various markup methods. Explain how market forces affect menu prices.
Step 1 – Add target percentage values for labor, all other expenses (except food), and profit.
Step 2 – Subtract the total in Step 1 from 1.00.
Step 3 – Divide the standard portion cost of the item by the divisor to obtain the menu selling price.
The Texas Restaurant Association’s menu pricing formula considers labor costs when determining selling prices.
Step 1 – Calculate the appropriate factor using the following formula.
Step 2 – Calculate the menu price using the following formula.
To calculate menu prices, use the following formula.
Menu prices can be affected by a variety of external forces, including
In general, the lower the menu item cost, the higher the markup (and the lower the food cost percentage).Markups Affect Selling Prices