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Costs of a Food service Operation. Expenses Labor Total cost of labor employed in the establishment.

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Presentation on theme: "Costs of a Food service Operation. Expenses Labor Total cost of labor employed in the establishment."— Presentation transcript:

1 Costs of a Food service Operation

2 Expenses Labor Total cost of labor employed in the establishment.

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

4 Expenses Food Cost To control Food cost, standards must be implemented Quality Quantity Portion size Yield The most important standards are the recipes

5 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 %

6 Portions The number of servings that one preparation of the recipe produces. Portions are needed to determine the portion cost For Example Recipe Cost = Portions = / 10 = $1.29 portion cost

7 Example A Recipe for Chicken Pot Pie makes 10 cups. A portion in considered 1 cup. How many portions are there? 10 / 1 = 10

8 Example SOUP Recipe Yield 2 gallons Serving size 8 oz How many Portions are there?

9 Yeild % EP/AP = Yield % Edible Portion / As Purchased = Yield %

10 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 %?

11 Yield % 45/50 = 90%

12 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 /.90 = $1.11/lb

13 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?

14 How much should I buy? Ep/ap = yield% Ap = ep/yield %

15 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

16 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?

17 Food Cost Expressed as a percentage Cost of food / sales price Cost of food = $2.00 Sales Price = $6.00 Food cost = 33%

18 Example Chicken Parm$ oz chicken breast oz sauce.25 1 slice cheese oz pasta.55 Fresh basil (garnish).05 What is the food cost???

19 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?

20 Determining Sales Price Desired food cost % Direct competition Labor intensity Demand (popularity)

21 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

22 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?

23 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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