1. Y2.U3.2
Controlling Food Cost

2. Questions What are the steps in the food flow process?
How is food cost determined?
How is food cost percentage determined?
How are standard portion costs established?
What is the difference between AP and EP cost?
What is a recipe yield?
What tools can be used in controlling portion?
How can an operation monitor food production and cost?
What methods can be used to price a menu?

3. Flow of food Establish control during all 7 stages
Purchasing: Establishing good quality standards is essential in acquiring and producing consistent top-quality product.
Receiving: Trained management and staff ensuring quality standards
Storage: Monitor units and what’s in them
Issuing: Inventory control, record keeping (selling/theft)
Preparation: product used to fullest, exact specs
Cooking: Cooked and portioned correctly
Service: Good service, orders taken correctly

4. Determine Food Cost
(Opening inventory + purchases = total food available) – Closing inventory = Total food cost
Some refine by subtracting employee meals, comps, food transfer to other location
Food Cost: the actual dollar value of the food used by an operation during a certain period of time
It includes the cost incurred when a food is consumed for any reason: sold, given away, wasted spoiled, incorrectly prepped, overportioned, overproduced, pilfered

5. Determine Food Cost Percentage
Total food cost / Sales =Food cost percentage
Food Cost Percentage is the relationship between sales and the cost of food
Usually determined by management
Often compared to company/industry standards, or historical costs
The relationship becomes unbalanced when cost controls are not followed

6. Standard Portion Costs
For each standardized recipe, establish a standard portion cost (exact amount each serving should cost)
A recipe cost card should exist for every multiple- ingredient item on the menu
27# profit
26# profit
25# profit
.10x50x6x50=1500x20=$30,000 yr.

7. AP/EP AP EP “As purchased” “Edible portion”
Price/product before accounting for trim and waste
? “10 pounds of onion, diced” EP
“Edible portion”
Price/product after accounting for trim and waste
? “10 pounds of diced onion”
Ultimately easiest and most exact way
Adjust price: /yp

8. Recipe Yields Determine recipe yield:
Calculate total yield of recipe (weight or volume)
Weigh or measure major ingredients
Take cooking loss into account
Divide total volume by portion size
Convert recipe yield: CF = D/O Conversion factor = desired yield / original yield

9. Portion Control Tools Scoops Ladles Serving spoons Serving dishes
Ramekins, bowls, cups
Portion scales
Accurate preparation

10. Monitoring Production Volume and Cost
How much to make? Goldilocks
Food Production Chart- shows how much product should be produced by the kitchen during a given meal period
Production Sheet- lists all menu items being prepared for a given date
Sales History- record of number of portions of every item sold on a menu
Records serve as a basis for a sales history used to forecast future sales and production

11. Production Sheet

12. Menu Pricing Menu is the primary sales tool
Should reflect overall cost of running operation
Purchase
Prepare
Serve
Labor
Rent
Utilities

13. Contribution Margin Method
Contribution Margin is the portion of dollars a menu item contributes to overall profits
This method represents a menu items profits in relation to its portion size
Gross food sales – cost of food = Gross profit or Total Contribution Margin / number of customers
100,000 – = 60,000 / 30,000 = $2.00 contributed to overhead and profit

14. Straight Mark-up Method
Multiply raw food cost by a pre-determined fraction
$0.63 x 2/3 = $0.42
$ $0.63 =$ 1.05

15. Average Check Method
Total revenue is divided by the number of seats, average seat turnover, and days open in one year
Gives an idea of the price range of items
Use this range, along with approximate food cost percentage to determine selling price

16. Food Cost Percentage Method
Item cost / Food Cost Percentage = Price
/ = $4.00