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# Costs of a Food service Operation PowerPoint PPT Presentation

Costs of a Food service Operation. Expenses. Labor Total cost of labor employed in the establishment. Expenses. Overhead Controllable Expenses Food, Labor, Supplies Non Controllable Expenses Rent, Utilities, Advertising, Insurance. Expenses. Food Cost

Costs of a Food service Operation

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## Costs of a Food service Operation

### Expenses

• Labor

• Total cost of labor employed in the establishment.

### Expenses

• Controllable Expenses

• Food, Labor, Supplies

• Non Controllable Expenses

• Rent, Utilities, Advertising, Insurance

### Expenses

• Food Cost

• To control Food cost, standards must be implemented

• Quality

• Quantity

• Portion size

• Yield

• The most important standards are the recipes

### Standardizing Recipes

Recipe Name

ID number

Portion Size

Yield

Ingredients

Waste %

Edible Product

As Purchased

Conversion Measure

Ingredient cost

Subtotal cost

Q Factor

Total Cost

Food cost %

### Portions

• The number of servings that one preparation of the recipe produces.

• Portions are needed to determine the portion cost

• For Example

• Recipe Cost = 12.90

• Portions = 10

• 12.90 / 10 = \$1.29 portion cost

### Example

• A Recipe for Chicken Pot Pie makes 10 cups. A portion in considered 1 cup.

• How many portions are there?

• 10 / 1 = 10

### Example SOUP

• Recipe Yield 2 gallons

• Serving size 8 oz

• How many Portions are there?

### Yeild %

• EP/AP = Yield %

• Edible Portion / As Purchased = Yield %

### Yield % Sample

• You can find yield % by performing a cut test.

• A 50# Bag of carrots is purchased

• After Peeling and dicing, 45# remains

• What is the Yield %?

• 45/50 = 90%

### Using Yield %

• Whole carrots cost \$1.00 per pound. How much do peeled carrots cost?

• Take the original cost and divide by yield % to get the true cost.

• 1.00 / .90 = \$1.11/lb

### One more…

• Red snapper has a yield of 30%. Red Snapper fillets cost \$12.99/lb and the whole fish cost 3.50/lb.

• How should you purchase your snapper?

### How much should I buy?

• Ep/ap = yield%

• Ap = ep/yield %

### Example

• A recipe calls for 5 lbs of diced pumpkin. Pumpkin has a yield of 60%. How much should you buy?

• 5 / .60 = 8.33 lbs

### One More

• You have a banquet for 100 people. They will be eating roast beef and each guest will be an ½ lb or 8 oz portion. The only issue is, when you roast the beef, it shrinks 20% which means the yield is 80%. How much beef should you purchase?

### Food Cost

• Expressed as a percentage

• Cost of food / sales price

Cost of food = \$2.00

Sales Price = \$6.00

Food cost = 33%

### Example

• Chicken Parm\$9.99

• 8 oz chicken breast1.50

• 2 oz sauce.25

• 1 slice cheese.40

• 12 oz pasta.55

• Fresh basil (garnish).05

What is the food cost???

### Food Cost %

• BLT

• 2 pieces of bread.15

• Bacon.60

• Lettuce.25

• Tomato.25

• You would like a 30% food cost, how much can you sell the BLT for?

### Determining Sales Price

• Desired food cost %

• Direct competition

• Labor intensity

• Demand (popularity)

### Formulas to know

• YIELD % = EP / AP

• EP = Starting weight – waste

• AP = EP/Yield %

• Food cost % = cost of product / sales price

• Portion Cost = Total Cost of Recipe / servings

### Portion Cost Example

• Clam Chowder costs \$22.00 per gallon to make.

• There are 16 servings at 8 oz per serving.

• What is the cost of 1 serving?

### Classwork / Homework

• Standardize your recipes – put them in easy to use formats

• Using the price sheet, fill out recipe cost form for all 6 recipes to determine sales price