Y 2 U 3 2 Controlling Food Cost

Y 2. U 3. 2 Controlling Food Cost

Questions • What are the steps in the food flow process? • How is food cost determined? • How is food cost percentage determined? • How are standard portion costs established? • What is the difference between AP and EP cost? • What is a recipe yield? • What tools can be used in controlling portion? • How can an operation monitor food production and cost? • What methods can be used to price a menu?

Flow of food • Establish control during all 7 stages 1. Purchasing: Establishing good quality standards is essential in acquiring and producing consistent top-quality product. 2. Receiving: Trained management and staff ensuring quality standards 3. Storage: Monitor units and what’s in them 4. Issuing: Inventory control, record keeping (selling/theft) 5. Preparation: product used to fullest, exact specs 6. Cooking: Cooked and portioned correctly 7. Service: Good service, orders taken correctly

Determine Food Cost (Opening inventory + purchases = total food available) – Closing inventory = Total food cost Some refine by subtracting employee meals, comps, food transfer to other location • Food Cost: the actual dollar value of the food used by an operation during a certain period of time • It includes the cost incurred when a food is consumed for any reason: sold, given away, wasted spoiled, incorrectly prepped, overportioned, overproduced, pilfered

Determine Food Cost Percentage Total food cost / Sales =Food cost percentage • Food Cost Percentage is the relationship between sales and the cost of food • Usually determined by management • Often compared to company/industry standards, or historical costs • The relationship becomes unbalanced when cost controls are not followed

Standard Portion Costs • For each standardized recipe, establish a standard portion cost (exact amount each serving should cost) • A recipe cost card should exist for every multipleingredient item on the menu 27#- 2. 83 profit 26#- 2. 78 profit 25#- 2. 73 profit. 10 x 50 x 6 x 50=1500 x 20=$30, 000 yr.

AP/EP AP EP • “As purchased” • “Edible portion” • Price/product before accounting for trim and waste • Price/product after accounting for trim and waste • ? “ 10 pounds of onion, diced” • ? “ 10 pounds of diced onion” • Ultimately easiest and most exact way • Adjust price: /yp

Recipe Yields Determine recipe yield: Convert recipe yield: 1. Calculate total yield of recipe (weight or volume) CF = D/O 2. Weigh or measure major ingredients 3. Take cooking loss into account 4. Divide total volume by portion size Conversion factor = desired yield / original yield

Portion Control Tools • Scoops • Ladles • Serving spoons • Serving dishes • Ramekins, bowls, cups • Portion scales • Accurate preparation

Monitoring Production Volume and Cost • How much to make? Goldilocks • Food Production Chart- shows how much product should be produced by the kitchen during a given meal period • Production Sheet- lists all menu items being prepared for a given date • Sales History- record of number of portions of every item sold on a menu • Records serve as a basis for a sales history used to forecast future sales and production

Production Sheet

Menu Pricing • Menu is the primary sales tool • Should reflect overall cost of running operation • • • Purchase Prepare Serve Labor Rent Utilities

Contribution Margin Method • Contribution Margin is the portion of dollars a menu item contributes to overall profits • This method represents a menu items profits in relation to its portion size • Gross food sales – cost of food = Gross profit or Total Contribution Margin / number of customers • 100, 000 – 40. 000 = 60, 000 / 30, 000 = $2. 00 contributed to overhead and profit

Straight Mark-up Method • Multiply raw food cost by a pre-determined fraction • $0. 63 x 2/3 = $0. 42 • $0. 42 + $0. 63 =$ 1. 05

Average Check Method • Total revenue is divided by the number of seats, average seat turnover, and days open in one year • Gives an idea of the price range of items • Use this range, along with approximate food cost percentage to determine selling price

Food Cost Percentage Method • Item cost / Food Cost Percentage = Price • 1. 2185 /. 3046 = $4. 00