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. Overhead Controllable Expenses Food, Labor, Supplies Non Controllable Expenses Rent, Utilities, Advertising, Insurance. Expenses. Food Cost

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Costs of a Food service Operation

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Costs of a food service operation

Costs of a Food service Operation


Expenses

Expenses

  • Labor

    • Total cost of labor employed in the establishment.


Expenses1

Expenses

  • Overhead

    • Controllable Expenses

      • Food, Labor, Supplies

    • Non Controllable Expenses

      • Rent, Utilities, Advertising, Insurance


Expenses2

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

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

Additional Cost

Food cost %


Portions

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

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

Example SOUP

  • Recipe Yield 2 gallons

  • Serving size 8 oz

  • How many Portions are there?


Yeild

Yeild %

  • EP/AP = Yield %

  • Edible Portion / As Purchased = Yield %


Yield sample

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 %?


Yield

Yield %

  • 45/50 = 90%


Using yield

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

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

How much should I buy?

  • Ep/ap = yield%

  • Ap = ep/yield %


Example1

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 more1

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

Food Cost

  • Expressed as a percentage

  • Cost of food / sales price

    Cost of food = $2.00

    Sales Price = $6.00

    Food cost = 33%


Example2

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 cost1

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

Determining Sales Price

  • Desired food cost %

  • Direct competition

  • Labor intensity

  • Demand (popularity)


Formulas to know

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

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

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

  • Create your menu

  • Turn in all 13 pages next week


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