Using Standardized Recipes to Determine Standard Portion Cost 3 Controlling Foodservice Costs OH 3-1

Chapter Learning Objectives Explain why a standardized recipe is important for cost control and product consistency. Describe information included in a standardized recipe. Compare “as purchased” and “edible portion” methods in determining the cost of recipe ingredients. Develop a recipe cost card using a standardized recipe.

Standardized Recipes Ensure Consistency In: Ingredient quality Preparation method Portion size Service method

Standardized Recipes Identify: Ingredient details (quality) Ingredient weights and measures Necessary equipment and tools Volume (number) of portions

Standardized Recipes also Include Preparation time Storage and preparation information Cooking method(s)

Reasons for Standardized Recipes: Accurate purchasing Dietary Concerns “Truth In Menu” laws (protects consumers from fraudulent menu claims) Menu Consistency New employee training Recipe Costing Menu Pricing

Excuses against Standardized Recipes: How might you problem solve the following excuses? Take too long to write out and use. We always lose them. Chef refuses to reveal his/her secrets. Too hard to read. Our people know how to makes things without them. Our staff cannot read/speak English.

Recipe Ingredient Costing Alternatives As Purchased (AP) method Price of an item before any trim or waste are considered Example—unpeeled, whole potatoes Edible Portion (EP) method Price of an item after all trim and waste has been taken into account Example—peeled, cubed potatoes

Comparison of AP and EP As Purchased (AP) refers to products as the restaurant receives them. Edible Portion (EP) refers to products as the guests receive them.

Calculating Shrinkage Percentage Shrinkage % + Yield % = 1.00 or 100% Product Loss AP Weight = Shrinkage % EP Weight AP Weight = Yield %

Calculating Shrinkage Percentage A recipe calls for 5 pounds of pork ribs with a total loss of 1 pound, 4 ounces. What is the waste percentage? What is the net product yield percentage? Product Loss 20 oz. AP Weight 80 oz. = 25% Shrinkage EP Weight 60 oz. AP Weight 80 oz. = 75% Yield

Managers Must: Determine if recipe ingredients are listed in AP or EP formats. Apply the correct costing method to the ingredients. Use the information to price menu items. Periodically re-cost recipe ingredients.

Calculating the Shrinkage of Prime Rib Activity – page 32 AP price per pound: $3.49 EP price per pound: $4.54 AP weight: 18 lb AP net cost: $62.82 ($3.49 x 18) Final weight: 13 lb Final net cost: $59.02 ($4.54 x 13) Shrinkage pounds: 5 lb (18 – 13) Shrinkage %: 27.8% (5 ÷ 18) Cost per portion: $3.41 (12 ÷ 16 = 0.75) (0.75 x $4.54)

EP Amounts Because many food items shrink when they are cooked, managers must know exactly how much cooking loss to expect.

Ways to Estimate Yields Butcher’s tests To measure loss from deboning, trimming, and portioning meats, fish, and poultry Cooking loss tests To measure loss from the actual cooking process Conversion charts Tell the expected or average loss of an item from (AP) to (EP)

Creating Recipe Cost Cards – page 34 & 35 Step 1 – Copy the ingredients from the standardized recipe card to the cost card. Step 2 – List the amount of each ingredient used. Step 3 – Indicate the cost of each ingredient as listed on the invoice.

Creating Recipe Cost Cards – page 34 & 35 Step 4 – Convert the cost of the invoice unit to the cost of the recipe unit. Example Milk purchased by the gallon for $2.80 Yields eight recipe-ready (EP) pints at $0.35 each. ($2.80 ÷ 8 pints = $0.35 per pint)

Creating Recipe Cost Cards – page 34 & 35 Step 5 – Multiply the recipe unit cost by the amount required in the recipe. Example Recipe amount required—3 pints Cost per pint—$0.35 Ingredient cost—$1.05 (3 pints x $0.35 per pint = $1.05)

Creating Recipe Cost Cards – page 34 & 35 Step 6 – Add the cost of all ingredients. Step 7 – Divide the total recipe cost by the number of portions produced. Example Total recipe cost—$145.50 Total recipe yield—50 portions Cost per portion—$2.91 ($145.50 ÷ 50 portions = $2.91 per portion)

Converting a Standardized Recipe to a Recipe Cost Card Activity – page 37

How Would You Answer the Following Questions? The cost of most AP food products is higher than their EP cost. (True/False) Which of the following is NOT true about recipe cost cards? They help establish menu selling prices. They reduce food production time. There should be one for every menu item. They inform managers about how much it costs to make a single portion of an item. Software programs designed to help foodservice managers create recipe cost cards are readily available. (True/False)

Key Term Review As purchased (AP) method Butcher test Conversion chart Cooking loss test Edible portion (EP) method

Key Term Review Portion size Recipe cost card Shrinkage Standard portion cost Standardized recipe

Chapter Learning Objectives— What Did You Learn? Explain why a standardized recipe is important for cost control and product consistency. Describe the information included in a standardized recipe. Compare “as purchased” and “edible portion” methods in determining the cost of recipe ingredients. Develop a recipe cost card using a standardized recipe.