Costs of a Food service Operation

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

Overhead Controllable Expenses Non Controllable Expenses Expenses Food, Labor, Supplies Non Controllable Expenses Rent, Utilities, Advertising, Insurance

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

Expressed as a percentage Cost of food divided by sales price 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%

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 %

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?

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 = ?

Chicken Parm 3.00 / .30 = $10

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