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Calculating the True Cost of a Meal:

Calculating the True Cost of a Meal:. A Planning and Analysis Tool for Nutrition Programs. Linda Netterville , MA, RD, LD Contractor, Nutrition Program, DADS. Objectives. Identify why it is important to know the meal cost Identify the key components of meal costing.

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Calculating the True Cost of a Meal:

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  1. Calculating the True Cost of a Meal: A Planning and Analysis Tool for Nutrition Programs Linda Netterville, MA, RD, LD Contractor, Nutrition Program, DADS

  2. Objectives • Identify why it is important to know the meal cost • Identify the key components of meal costing. • Identify steps to keep meal cost within the budget. • Clarify audience questions and wrap-up

  3. Calculating the True Cost of a Meal

  4. Definitions • Cost= price paid to acquire, produce, accomplish or maintain anything • Price = the sum in money or goods for which anything is or may be bought or sold • Rate= a fixed charge per unit of quantity

  5. Definitions • Expenditure = Outlays/payments made by the SUA and/or AAA’s using OAA federal funds to provide an allowable service • Total Service Expenditure= OAA expenditures plus all other funds administered by the SUA and/or AAA’s on behalf of elderly individuals and caregivers for services meeting the definition of OAA services

  6. Why is It Important?

  7. Changing ResourcesGovernment/Public Funding • Older Americans Act Title III (C1, C2, NSIP), V, VI • Other Federal Social services or community service block grants • State-Vary by Sate

  8. Changing Resources • Competition for limited dollars • Grants • Fundraising • Decline in client contributions • Competition with for profit companies

  9. Program Operations • Meet the demand for meals • Maintain quality • Manage costs against revenues

  10. Program Accountability • Demonstrates impact of program to funders • Performance measurement • Demonstrates efficiency • Demonstrates effectiveness

  11. Program Sustainability • Optimizes costs relative to revenue • Potential to provide meals and services for additional revenue • Understand bid prices if purchasing meals from a caterer

  12. Program Sustainability

  13. Program Sustainability

  14. What are the Key Components of Meal Costing?

  15. Calculating Food Cost • To find the food cost per meal: Beginning Inventory +Purchases (from invoices)________ =Total Food Available for the Period - Ending Inventory__________________ =Raw Food Cost

  16. Calculating Food Cost To find the raw food cost per meal: Raw Food Cost  Number of Meals Served= Raw Food Cost per Meal

  17. Calculating Food Cost Group Activity Worksheet Activity #1

  18. Calculating Labor Costs

  19. Calculating Total Meal Costs Group Activity Worksheet Activity #2

  20. How Can You Control Meal Costs?

  21. Menu Planning • Utilize a cycle menu • Cook from scratch vs. convenience • Food availability • Consider season variations • Buy food of the quality most suitable • Consider the cost of labor • Consider the equipment • Consider the service container

  22. Purchasing • Purchasing • Compare price and quality • Purchase according to the menu • Consider what is on hand • Consider delivery and storage • Buying methods • Open Market • Sealed or Fixed Bid • Cost-Plus • Co-op/Group Purchasing

  23. Receiving and Storage • Food on hand represents $$$ • Check all deliveries for: • Pricing • Quantity • Quality • Maintain proper storage: • Dry • Refrigerated • Frozen • Rotate stock

  24. Food Preparation • Standardized Recipes • Consistent quality • Predictable yield • Customer satisfaction • Consistent nutrient content • Food cost control • Efficient purchasing • Labor control

  25. Food Service • Maintain proper temperatures of food • Cold food below 410 • Hot food above 1350 • Accurate forecasting and preparation • Portion control

  26. Labor • Efficient scheduling • Availability of volunteers • Labor should be in relationship to the amount of work • Meals per man hour

  27. Possible Causes of Meal Costs • Poor menu planning • Careless purchasing and receiving practices • Failure to use standardized recipes • Inaccurate forecasting • Careless food storage • Waste in food preparation • Portion control not followed

  28. Compare Actual Costs to Budgeted • Monitor expenditures/revenues on a regular basis • Analysis of cost/meal • Raw food cost per meal • Total cost per meal • Identify areas under or over budget • Take action to control

  29. Compare Actual Costs to Budgeted Group Activity Worksheet Activity #3

  30. Questions?

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