1. UNITS AND RECIPE COSTING

2. OBJECTIVES The student will be able to: Understand how to calculate unit cost Understand and use typical invoices Understand how to calculate the cost of a recipe Understand how to calculate portion cost

3. UNIT COST Unit: A specified quantity, usually refers to the number or amount in a package; may be expressed as weight, volume, dozen, case, each, and so on. Unit Cost: The price paid to acquire one of the specified units. A.P.(As purchased), the condition and amount of an item as it is purchased or received from the supplier.

4. A.P. Cost =Cost per Unit Number of Units

5. RECIPE COST Recipe Cost: The total cost of all ingredients in a standardized recipe. The total recipe cost is calculated with the following two- step procedure: STEP 1: Determine the cost for the given quantity of each recipe ingredient using the unit costing procedures described previously.

6. STEP 2: Add all of the ingredient costs together to obtain the total recipe cost. Total Recipe Cost = Cost per Portion Number of Portions

7. LABOR COSTS Direct Labor: refers to the work that is directly involved in the production of menu items. Indirect Labor: the labor required to clean the parking lot, balance the cash register, taking inventory and so on. Prime Cost: the expense for direct labor is added to food cost to arrive at a figure, which is the total cost of preparing a food item for sale.

8. Direct Labor + Food Cost = Prime Cost