Financial Management Revenue Per Meal and Standardizing Team Up June 10, 2016

School City of Hammond Julie Boettger, Director Food and Nutrition Services 14,000 enrollment, 22 schools (7 secondary, 15 elem) 80% Free/reduced CEP in elementary schools After-school snack, Supper, Summer Food Service 130 staff

Objectives Introduce calculation for determining average revenue per meal Explain how average revenue per meal is useful for planning food cost Explain what standardizing an operation means Explain how standardizing operation helps to control costs

Determining Revenue for Breakfast RED-PRICE FREE $2.00 $ 1.69 $ 1.66 $ 1.99 $1.66 $ .29 $ .29 TOTALS N/A Local Funds 1.69 1.36 $1.99 .29 Federal Reimbrsmt $ 2.00 $ .00 $ .00 $ 0.00 Cash Sales Adult (8) Severe Need (7) Reg. (6) (5) (4) Sec. Paying Student (3) Elem. Paying Student (2) Source (1)

Example of Average Revenue for a Breakfast $1,770,904 (Total Revenue) ÷ 1,004,591 (Number Served) = $ 1.763 (round down) = $1.76 AVERAGE REVENUE $1,770,904.40 1,004,591 TOTALS 0.00 $ 2.00 Adults 1,692,471.12 $ 1.99 850,488 Free 40,732.38 $ 1.69 24,102 Reduced-Price $ 37,700.90 $ .29 130,001 Paid (=) REVENUE BY CATEGORY (4) (X) REVENUE BY CATEGORY (3) AVERAGE NUMBER SERVED (2) CATEGORY (1)

Multiply Average Revenue per Breakfast by Multiply Average Revenue per Breakfast by .40 (40%) to determine amount for food cost. $1.76 .40 $ .70

Breakfast Components Milk $.23 Grain .27 Fruit .20 Total $.90

Example of How to Determine Revenue for Lunch $ 3.50 $ 3.38 $ 2.60 $ .60 TOTALS N/A Local Funds .06 Certified ($.06) .23* Entitlement Commodity Value 2.69 $ 3.09 .31 Federal Reimbsmnt $ .40 $2.00 $ 0.00 Cash Sales ADULT LUNCH (6) REDCD-PRICE (5) FREE (4) SEC. PAYING (3) ELEM. PAYING (2) SOURCE (1)

Example of Average Revenue for a Lunch (Elementary) $3,249,283.92 (Total Revenue) ÷ 1,063,689 (Number Served) = $ 3.055 or $3.05 AVERAGE REVENUE FOR A LUNCH $3,249,283.92 1,063,689 TOTALS $ 3.50 Adults 3,174,610.92 $ 3.38 939,234 Free 0.00 Reduced-Price $74,673.00 $ 0.60 124,455 Paid (=) TOTAL REVENUE BY CATEGORY (4) (X) REVENUE BY CATEGORY (3) AVERAGE NUMBER SERVED (2) CATEGORY (1)

Multiply Average Revenue per Elementary Lunch by Multiply Average Revenue per Elementary Lunch by .40 (40%) to determine amount for food cost. $3.05 .40 $1.22

Lunch Components Entrée $ .50 Grain (2) .16 Vegetable .10 Fruit .15 Milk .23 Condiment .06 Total $1.35

Example of Average Revenue for a Lunch (Secondary) $2,878,900.70 (Total Revenue) ÷ 876,256 (Number Served) = $ 3.286 or $3.28 AVERAGE REVENUE FOR A LUNCH $2,878,900.70 876,256 TOTALS $ 3.50 Adults 2,392,495.82 $ 3.38 707,839 Free 210,256.28 62,206 Reduced-Price $276,148.60 $ 2.60 106,211 Paid (=) TOTAL REVENUE BY CATEGORY (4) (X) REVENUE BY CATEGORY (3) AVERAGE NUMBER SERVED (2) CATEGORY (1)

Multiply Average Revenue per Secondary Lunch by Multiply Average Revenue per Secondary Lunch by .40 (40%) to determine amount for food cost. $3.28 .40 $1.31

Standardized Operation Cycle Menus – published for the year Control Items (SKUs) purchased Standardize Recipes Standardize portioning/packaging tools Preprinted production records (components, servings/purchase unit, serving size or tool Establish food cost targets (40%) Establish selling price markups (2.5 x cost) Computerize – it forces standardization

Benefits of Standardizing Controls costs Controls inventory Reduces waste Improves forecasting Improves pricing from vendors Makes training of staff easier and improves confidence Improves quality because staff become experienced at producing the items