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

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

5. 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%

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)