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Costs of a Food service Operation

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

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Costs of a Food service Operation

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  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. 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 % Standardizing Recipes

  6. Yield • The number of servings that one preparation of the recipe produces. • Yield determines portion cost • For Example • Recipe Cost = 12.90 • Yield = 10 • 12.90 / 10 = $1.29 portion cost

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

  8. 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%

  9. Example • Chicken Parm $9.99 • 8 oz chicken breast 1.50 • 2 oz sauce .25 • 1 slice cheese .40 • 12 oz pasta .55 • Fresh basil (garnish) .05 What is the food cost???

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

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

  12. 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?

  13. 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?

  14. 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?

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