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 To control Food cost, standards must be implemented Quality Quantity Portion size Yield The most important standards are the 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 %

Yield The number of servings that one preparation of the recipe produces. Yield determines portion cost For Example Recipe Cost = Yield = / 10 = $1.29 portion cost

Sample SOUP Recipe Yield 2 gallons Serving size 8 oz What is the yield?

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

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

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

Formulas to know EP/AP = YIELD EP = Starting weight – waste Food cost % = cost of product / sales price

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?

Determining Food Cost by Desired food cost % Chicken Parm costs $2.00 to make. Your desired food cost % is 30%. How much should you sell this for?

Waste example You have a 50 lb bag of carrots. After peeling and trimming you have 5 lbs of waste. What is the Formula for finding waste percentage?