Costs of a Food service Operation

1. Costs of a Food service Operation

2. Expenses • Labor • Total cost of labor employed in the establishment. • Kitchen • Waitstaff • Busboys • Maintenance • Hosts • Management

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. 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%

6. Determining Food Cost by Desired food cost % • Steps • 1. add cost of all ingredients • 2. divide by number of portions • 3. divide by desired food cost %

7. Lasagna • 1 lb pasta $2.00 • 12 oz sauce $.50 • 1 lb cheese $4.00 • 1 lb ground beef $3.80 • This recipe makes 4 portions. Your restaurants desired food cost % is 30%. How much should you sell it for?

8. Determining Food Cost by Desired food cost % • Chicken Parm costs $3.00 to make. • Your desired food cost % is 30%. • How much should you sell this for? • $3.00 / .30 = ?

9. Chicken Parm • 3.00 / .30 = $10

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