Chapter3

PRE- PURCHASE FUNCTIONS

STANDARDIZED RECIPESStandard ingredients, Portion size, quality,

consistency, quantity, purchasing

COST CARDSPortion Cards, Yield Factors,

Sell Prices

SPECIFICATIONSProduct Descriptions

PAR STOCK Inventory levels, Order Building

REQUISITION Order building, Purchasing

SHOPPING LISTS Call sheets, Bid sheets,

Suppliers, Bidding

PURCHASE ORDERS Security,

Ship Order, Price Guarantee, ContractBOH FUNCTIONSRECEIVING ACTIVITIES

Best practices, invoices, security, sanitation

INVOICE MANAGENENTPayment, Price checking, Security

STORAGE PRACTICES & INVENTORY MANAGEMENT

Best Practices, Sanitation, Security, Inventory methods

KITCHEN PRODUCTIONProduction schedules, Portion Tracking, Recipe Control, Serving Controls, Food Safety

PRODUCT ISSUINGRequisitions, transferred, daily & monthly costs, food cost percentage

FOH FUNCTIONS

GUESTGuesting, Seating, sales, serving, busing,

payment, Comment Cards

GUEST CHECKSales History, turnover, average

check, cash management, revenue forecasting & budgeting, menu item

analysis

THE MENU

PORTION COST The basis for determining the selling price The result of an inaccurate portion cost may be that the selling price is not high enough to cover the cost for that dish and in fair share of other budgeted expenses

CAUSES OF INACCURATE PORTION COST1. No standardized recipes, or recipes exist but not

used2. Poorly written standard recipes3. No standard portion size on recipe4. Inadequate equipment to portion correctly5. Lack of improper equipment6. Not a management priority7. Supplier price increases8. Poor purchasing – lack of research costs

CAUSES OF INACCURATE PORTION COST

1. RECIPE• Used for menu items with multiple ingredients

and little or no shrinkage or trim. • Menu items are portioned after completing the

recipe.• Recipe yields are not subject to additional

shrinkage or loss from cooking. • The final recorded number of servings is accurate

as long as ingredients are measured properly and procedures are followed as recorded on the recipe.


2. PLATE COST CARDS• Used to cost one complete meal as it is served to

the guest.• This is the best used for operations using

convenience items that are not prepared in the same way as a recipe item is prepared.

3. BUTCHER TEST • Used for costing menu items that have loss

because of the trimming.• These menu items may be portioned, cooked,

and served, or the item may be roasted and only portioned after cooking

• If the item is only portioned after cooking, a cooking loss test could be used to calculate the final portion cost.

4. COOKING LOSS TEST• Used for menu items that will experience

shrinkage and final trimming during the cooking process.

• These items are only portioned after cooking. There may be some additional trimming.


RECIPE COST CARDS

A form used to calculate the cost of one serving of a specific menu item using the approved standardized recipe to produce it.The key to this work is having accurate standardized recipes.If portion costs are not accurate, then menu selling price are probably not accurate to cover expenses and produce profit.To keep costs current, it is critical to update the pricing on the recipe cost cards frequently because prices from suppliers often change.

RECIPE COSTING GROUND RULES

1. For a manger to cost accurately, recipe units must agree with purchasing units. If you purchase something by the pound and the recipe calls for that item to be measured in cups, you cannot do so without converting the measure into weight equivalency.

2. When costing, always round up to the next penny.

3. Rounding should only be done in the end of the equation rather than at every break down.

4. Ignore spices, herbs and ingredients that are difficult to cost out. These will be accounted for in the “spice factor”

RECIPE COSTING GROUND RULES

In addition to ingredients and invoice costs, a recipe cost card includes other information that is used to ultimately find the Minimum Menu Price (MMP) OR Minimum Selling Price, for each item.

ADDITIONAL COST CARD INFORMATION Recipe MenuDate when pricedNumber of portionsPortion sizeType of recipe

File Code ReferenceCost per PortionSpice Factor Percentage Q Factor, if usedStandard food cost percentage

THE COST CARD FORM

The Cost card form was designed with cost control students in mind.It works well in teaching the mechanics of recipe costingThe format forces one to do several things:

1. Record invoice purchasing units2. Break these purchasing units down into a

unit down into a unit that agrees with the recipe quantity.

Most costing forms record the purchasing units in agreement with recipe units.

BASIC COST CARD MATH

MATHEMATICAL FORMULAS USED TO EXTEND THE INGREDIENTS

QUANTITY X UNIT PRICE = EXTENDED PRICE

EXTENDED PRICE

YEILD

COST PER

Recipe Name: Chicken Noodle Soup Type of Recipe: Soup Spice Factor % =

Date: 8/2 xxx File Code: Soup – 6 Q Factor =

#of servings: 25 Cost per Portion (CCP) : FC % =

Portion Size: 10 oz.

Recipe Ingredients Invoice Recipe Extension

Amount Unit Cost Unit Cost Unit

1 ½ gal. Chicken Stock $ .50 qt. $2.00 gal.

1 ½ lb. Chicken breast fillet 2.25 lb. $2.25 lb.

1 ¼ lb. Egg Noodles, narrow 17.00 Case/ 10 lb.

$1.70 lb.

½ lb. Onions 15.00 Bag/ 50 lb.

.30per lb. or .01875 per oz.

lb.

2 Each Bay leaves SF

To Taste Salt SF

To Taste Pepper SF

25 Each Oyster crackers, pkg. 10.65 Case/ 200 .05325 each

25 oz. Parsley, chopped, garnish SF

Rec. Cost/# of servings

CPP

CPP + Q

CPD X 1.SF%

TCPD/FC% = MMP

A B C D E F G H I

SAMPLE COST CARD

Recipe Name: Chicken Noodle Soup

Date: 8/2 xxx

#of servings: 25

Portion Size: 10 oz.

Recipe Ingredients

Amount Unit

1 ½ gal. Chicken Stock

1 ½ lb. Chicken breast fillet

1 ¼ lb. Egg Noodles, narrow

½ lb. Onions

2 Each Bay leaves

To Taste Salt

To Taste Pepper

25 Each Oyster crackers, pkg.

25 oz. Parsley, chopped, garnish

A B C

RECIPE COLUMNS (A,B,C) These columns are completed by transferring the recipe quantities and ingredient names from the standardized recipe to the first three columns on the cost cardThe Recipe Amount column is for the quantity of ingredients.The recipe unit column records the measuring unit.The ingredients column records each ingredient.

Invoice

Cost Unit

$ .50 qt.

2.25 lb.

17.00 Case/ 10 lb.

15.00 Bag/ 50 lb.

SF

SF

SF

10.65 Case/ 200

SF

D E

INVOICE COLUMNS (D&E) The first column in this section (cost) transfers

the invoice cost of the purchasing unit to the form.

This number comes from inventory files or invoices.

Normally, it will come from inventory records The second column (unit) records the unit of

measure. Make note of several important things while

reviewing the invoice column:• Assume the chicken stock is produced in-

house is the result of costing a sub recipe for stock This cost would be found in the inventory file under stocks. Other options would be to purchase canned chicken stock or to use a stock base to prepare the stock

• Notice the notation of SF (spice factor) for salt, pepper, and parsley. Spices, herbs, garnish components and other ingredients would be noted with SF in place of an invoice cost.

Recipe

Cost Unit

$2.00 gal.

$2.25 lb.

$1.70 lb.

.30per lb. or .01875 per oz.

lb.

.05325 each

Rec. Cost/# of servings

CPP

CPP + Q

CPD X 1.SF%

TCPD/FC% = MMP

F G

RECIPE COLUMNS (F&G) This column is where the calculator

comes into play.The process is simple – break down the invoice cost into a unit that agrees with the recipe cost.The four ingredients we have pricing issues with are:

•The Stock•The egg noodles•The onion•The crackers

Each of these is purchased in a different unit (usually larger) that the recipe is calling for.To remedy the situation, break the cost down into a unit that is compatible with the units called for in the recipe.

RECIPE COSTING HOT TIP # 1 When the recipe unit and the purchasing unit are

not compatible, break the purchasing cost down into a unit that is compatible with the units called for the recipe

CHICKEN STOCKThe recipe calls for 1 ½ gallons. The invoice cost is .50 per quart. One of two things can happen. Either:

1. Convert the quart cost to a gallon cost, and record that in the recipe cost column. The math:4 quarts per gallon x .50 (unit price) = $2.00 per gallon

OR2. Convert 1 ½ gallons into quarts and use .50 per

quart in the recipe cost column. The math: 1 ½ gallons = 6 quarts

Use these conversions in the way that makes the most sense to you. Mastery of volume measures is needed to do this work

CHICKEN BREAST

Anytime the recipe unit and the invoice unit are in harmony as in the case of the chicken, the task is quite simple. The purchasing unit and the recipe unit match. The invoice cost simply transfers to the recipe cost column with no further manipulation or breakdown needed.

TO FIND THE COST PER PURCHASING UNIT

COST PER

EXTENDED PRICE

YEILD

RECIPE COSTING HOT TIP # 2 When the recipe and the invoice unit match,

simply transfer the cost information to the recipe cost column. No further manipulation or break down is needed

EGG NOODLESThe egg noodles are purchased in a 10 pound case. That is the purchasing unit. The recipe calls for a portion of the case. The task here is to compute a unit cost for the egg noodles that agrees with the recipe units.

COST PER

EXTENDED PRICE

YEILD

The extended price is the invoice cost for the full case of egg noodles. Think of the yield as being what is inside the case – in this case, it is 10 pounds of egg noodles. The end of the formula is the left blank because this will change, depending on the product you are working with. For example the outcome is cost per pound. COMPUTATION:

COST PER

EXTENDED PRICE

YEILD

$17.00

10 lb. $1.70 per pound

$1.70 would be the recipe cost for egg noodles.*The units must be included.

ONIONSThe process is the same as for the egg noodles, but with a little twist. The onions are purchased in 50- pound bags, so the task is to break the cost down to the cost per pound.

COMPUTATION:

COST PER

EXTENDED PRICE

YEILD$15.00

50 lb. $30 per pound

Because only .5 pound is needed, you needed you must use the formula one more time, to find the cost per ounce. You must compute again.

COMPUTATION:

COST PER

EXTENDED PRICE

YEILD.3

16 (ounces in a pound).01875 per ounce

The next step is to multiply the 8 ounces needed in the recipe by .01875 to get the final cost for 8 ounces. (This is actually the last step in the process and since we are in the process and since we are in the middle of it, it makes good sense to just continue the equation and finish the job.) The cost recorded in the invoice cost column can be recorded in either the cost pound or cost per pound or cost per ounce notation..018750 (cost per ounce) x 8 (recipe ounces) = .15 (cost per ½ pound )

There is a quicker way to calculate the cost of the onions. Eight ounces is one half of a pound. Just divide .30in half and get the answer quickly. Be aware that there is no “rule” that recipes have to record ingredients in such convenient units.

The procedure for the oyster crackers is exactly the same.OYSTER CRACKERS

COST PER

EXTENDED PRICE

YEILD$ 10.65

200.05325

Because ultimately, 25 packages are needed – 1 for each serving of soup – the final extension will be:

EXTENDED PRICE / YIELD = COST PER PACKAGE OF CRACKERS

$ 10.65 / 200 = .05325COST PER PACKAGE OF CRACKERS X 25 = TOTAL EXTENDED PRICE

.05325 X 25 = $ 1.33125 OR $1.34

Rounding should take place at this point rather than rounding at the pre-package cost and then rounding again at the end.

RECIPE COSTING HOT TIP # 3

Rounding should take place at the end of the work; do not round at every step of the way. Carry the calculation through on your calculator all the way to the final answer, then round up.

PRACTICE CALCULATIONS

8 lb. of carrots2 pt. of half & half1 c. of milk20 lb. of potatoes4 lb. of butter2 - #10 can of tomatoes

$17.50 / 25 lb. bag of carrots$ 3.69 / ½ gal. of half & half $2.25 / 1 gal. of milk $14.50 / 50 lb. bag of potatoes$81.00 / 36 lb. case of butter$36.50 / 6 - #10 cans of tomatoes

Practice breaking down the following examples into recipe cost

PRECIPE CALLS FOR INVOICE COST RECIPE COST

ANSWERS

CarrotsHalf & Half

Milk

PotatoesTomatoes

$17.50 = .70 per pound$3.69 / 2 = $ 1.85 per pint

or$3.69 / 64 (oz. per ½ gallon) = .0576.0576 x 32 oz. (oz. per pint) = $ 1.85

$2.25 / 16 (cups per gallon) = .1406(if sticking to the rule of always rounding costs up, this would be recorded as .15)$14.50/ 50 lb. = 29 per pound$36.50/6cans = $6.0833 per can, or $6.09

FINISHING THE COSTING JOBThe last step is to compute the extensions, this could be done

by multiplying the recipe quantities and the recipe cost together. This is called extending the recipe and the formula is as follows:

RECIPE QUANTITY X RECIPE UNIT PRICE = EXTENDED PRICE

OR

QUANTITY X UNIT PRICE = EXTENDED PRICE

Recipe Name: Chicken Noodle Soup Type of Recipe: Soup Spice Factor % =

Date: 8/2 xxx File Code: Soup – 6 Q Factor = #of servings: 25 Cost per Portion (CCP) : FC % = Portion Size: 10 oz.

Recipe Ingredients Invoice Recipe ExtensionAmount Unit Cost Unit Cost Unit

1 ½ gal. Chicken Stock $ .50 qt. $2.00 gal.

1 ½ lb. Chicken breast fillet 2.25 lb. $2.25 lb.

1 ¼ lb. Egg Noodles, narrow 17.00 Case/ 10 lb. $1.70 lb.

½ lb. Onions 15.00 Bag/ 50 lb. .30per lb. or .01875 per oz.

lb.

2 Each Bay leaves SFTo Taste Salt SF

To Taste Pepper SF25 Each Oyster crackers, pkg. 10.65 Case/ 200 .05325 each

25 oz. Parsley, chopped, garnish SF

Rec. Cost/# of servingsCPPCPP + QCPD X 1.SF%TCPD/FC% = MMP

A B C D E F G H I

COMPUTING FOR THE EXTENTION

COLUMN: A X F = HStock: 1 ½ gals. X $2.00 per gallon = $3.00Chicken Breast: 1 ½ lb. x $ 2.25 per pound = $3.375 or $3.38Egg Noodles: 1 ¼ lb. x $ 1.70 per pound = $ 2.125 or $2.13Onions: ½ lb. x .30 per pound = .15

* When costing, always round up to the next penny.

TOTAL RECIPE COST AND CALCULATING THE COST PER

PORTIONTo determine the total recipe cost, add all the extension together. The result tells what it costs to produce the full recipe. This is nice to know, but more important, one must now what it costs for just one serving. Just use the following formula:

COST PER

EXTENDED PRICE

YEILD

$10.00

25 .40

The total recipe cost for the Chicken Noodle Soup is $10.00. This is the extended price. The recipe’s yield is 25.

Recipe Name: Chicken Noodle Soup Type of Recipe: Soup Spice Factor % =10%Date: 8/2 xxx File Code: Soup – 6 Q Factor = #of servings: 25 Cost per Portion (CCP) : FC % = Portion Size: 10 oz.

Recipe Ingredients Invoice Recipe ExtensionAmount Unit Cost Unit Cost Unit

1 ½ gal. Chicken Stock $ .50 qt. $2.00 gal. $3.001 ½ lb. Chicken breast fillet 2.25 lb. $2.25 lb. $3.38

1 ¼ lb. Egg Noodles, narrow 17.00 Case/ 10 lb.

$1.70 lb. $2.13

½ lb. Onions 15.00 Bag/ 50 lb. .30per lb. or .01875 per oz.

lb. .15

2 Each Bay leaves SF SFTo Taste Salt SF SF

To Taste Pepper SF SF25 Each Oyster crackers, pkg. 10.65 Case/ 200 .05325 each $1.34

25 oz. Parsley, chopped, garnish SF SF

Rec. Cost/# of servings .40CPPCPP + QCPD X 1.SF%TCPD/FC% = MMP

A B C D E F G H I

COMPLETED COST CARD FOR CHICKEN NOODLE SOUP

AP (as purchased) •this is the acronym for all products received at the door.•It is the total amount of raw product purchased from the supplier.

EP (edible proportion) or AS (as served)•Represents a food product that has been processed in some way, shape, or form.•It has been peeled, trimmed, cooked, and proportioned.

AS PURCHASED, EDIBLE PORTION, RECIPES AND COSTING

Generally speaking, recipes are recorded in EP quantities; this means the amount of product needed to produce the requisite number of servings is the processed amount of product (EP). It is not the AP amount of product. The AP amount is the quantity needed to end up with the EP amount called for in the recipe. As such, the cost of the item must be based on this AP amount of product and not just the end amount (EP). Failure to account for the EP cost of product affects.

•Portion costs•Selling Prices•Purchasing quantities

AP AMOUNT

EP AMOUNT

YEILD %

8 ounces

87% 9.19

EXAMPLE

Using the chicken noodle soup as reference, The recipe calls for ½ a pound of onions. In order to get a half pound of EP for the recipe, a larger quantity would have to be used (AP). Onions Have a standard recipe yield of 87%. By dividing the recipe of onions amount by their yield percentage, the AP amount is easily determined.

EXAMPLE

Chicken Noodle Soup

Recipe Ingredients

Amount Unit Yield% New amount

1 ½ gal. Chicken Stock

1 ½ lb. Chicken Breast meat

1 ¼ lb. Egg noodles, narrow

½ lb. 87% 9.19 oz. Onions

2 each Bay leaves

To taste Salt

To Taste Pepper

25 each Oyster crackers, pkg.

½ oz. Parsley, chopped, garnish

EXAMPLE OF A COST CARD WITH YIELD PERCENTAGE COLUMN

Notice that in order to end up with 8 ounces of onions EP, the cooks need to start with 9.19 ounces. In this example, the cost difference is minimal because the recipe calls for only 8 ounces of onions.

NAME: Chili DogYIELD: 1 servingDATE: 8/2XXX

Hot sand: #5Spice Factor:: 1 servingFood Cost %: 8/2XXX

Cost Per Production: 71True Cost per Dish:Minimum Menu Price:

All beef hot dog (8/lb)Rolls, hot dogChili Sauce (#10 can)Pickle chips (gal.)French Fries

1 each1 each2 oz.6 each chips6 oz.

$1.92/ lb. (8/lb)$1.25 / pkg. (8/pkg.)$20.22/ 6 # 10 cansSF$12.50/20 lb. caseTOTAL

.24

.16

.07SF.24.71

QuantityIngredients Unit Price Extension

Recipe costing for plate cards is quite simple. Some formats include the costing directly on the card itself.

EXAMPLE

*SF – Spice Factor

COMPUTATION(Ext. Price / Yield = Cost per _ )

Hot dogsRollChili Sauce

French Fries

$1.92/8 (per pound) = .24 per dog$1.25 / 8 (per package) = .156 or .16 per roll $20.22/ 6 cans per case = $3.37per can$3.37 / 104 ounces per can = .0324 per oz..0324 x 2 ounces per dog = .064 or .07$ 12.50 / 20 = .625 per pound.625 / 16 ounces per pound = .039 per ounce.039 x 6 = .2343 or .24

Add all the component extensions together:.24 + .16 + .07 + .24 = .71Total Plate Card Cost = .71

Using the computation above the Cost per Production ( the raw food cost for one serving) for a standardized recipe item and a plate card menu item was found . To complete the costing process, the spice factor must be added onto the Cost per Portion so the cost of all of the food used to produce the item is accounted for

RECIPE AND PLATE CARD INGREDIENT COSTING FORMULAS

QUANTITY X UNIT PRICE = EXTENDED PRICEEXTENDED PRICE / YIELD = COST PER

Once the cost per portion is determined, it has to be perfected so that the selling price covers all raw food cost plus other budgeted expenses and profit. Costing is not complete until every ingredients purchased is accounted for in some part of the costing formula.

MINIMUM MENU PRICE FORMULACOST PER PORTION + Q FACTOR

= COST PER DISH (CPD)

COST PER DISH X 1.SF% = TRUE COST PER DISH (TCPD)

TRUE COST PER DISH / STANDARD FOOD COST % = MINIMUM PRICE (MMP)

OTHER FACTORS NEEDED TO ARRIVE AT AN ACCURATE MINIMUM MENU PRICE

Q FACTOR - Used for side dishes offered with entrees using a semi - a - la carte pricing systemSPICE FACTOR – Factor used on all items for spices, herbs, and so forth

THE SPICE FACTOR

The spice factor is a percentage that is added to every menu item to account for things such as spices, herbs, garnishes and waste.The spice factor is like a tax, it is charged in every menu item.It is nondiscriminatory in that it is tacked on to the portion cost of every menu item without regard to what the item is.

THE SPICE FACTOR

WHAT DOES IT COVER?1. Spices, herbs, seasonings used in quantities that are difficult to cost

out2. Garnish cost3. Waste – every operation allows a certain amount of waste. This waste

is considered the cost of doing business. It is the product left in a can or small jar amounts of food that is spilled or dripped. The perishable nature of food makes it necessary to allow for waste. The amount considered acceptable is a management decision.

4. Very expensive ingredients. Rather than cost very expensive items into a recipe, the cost can be placed in this category and spread all over items sold.

5. Whatever else management chooses. When it comes to costing, It is really management’s decision on what would fall under this category. The more ingredients placed in this category, however, the higher the percentage will be.

HOW IS IT DETERMINED?1. Identify from recipes and inventory list which products belong in

the category.2. Determine the cost of purchasing these items over a period of

time, showing usage or turnover. Because spices and herbs, represent the bulk of these other items , looking at one week’s worth of purchases will not give the most accurate picture. Several weeks or a month’s worth of records may be needed to get a representative sum.

3. Determine the total food purchased for the same period of time.

SPICE FACTOR %

COST OF SPICE FACTOR ITEMS

TOTAL FOOD PURCHASES

TO DETERMINE THE SPICE FACTOR PERCENTAGE

(The percentage represents the portion of total food purchases that these items represent.)

USING THE SPICE FACTOR

Using the Spice Factor is quite simple. Each item’s cost per portion is increased by this percentage. To demonstrate the concept, look at the chart below. It was determined that the soup cost .40 to produce. Since the soup is not an entrée, the next in line is the (Q factor) is skipped Assume the spice factor for this operation is 10% Simply multiply the cost per portion by 1.10 (110%) to get new cost per portion

Recipe Cost / # of serving $ 10.00 / 25

Cost per Portion (CPP) .40

CPP+ Q = CPD

CPD x 1.SF% = TDPD .44

.40 X 1.10 = .44

TCPD/ FC% = MMP



CPP+ Q = CPD

CPD x 1.SF% = TCPD .44

.40 X 1.10 = .44

TCPD/ FC% = MMP

WHAT DOES THIS MEAN?

The cost per potion has now jumped to .44. This means that .04 is added on to cover the spices, herbs, garnish, waste and so on, for this bowl of soup. Looking back at the recipe, this would be the bay leaves, salt, pepper and parsley. This would also include waste for this product.When using the spice factor, resist the temptation to just multiply the .40 by .10 (10%) and add the .04 to the .40. Use the proper formula. (CPD X 1.SF% = TCPD)


Be sure to write the spice factor line like this:

COST PER PORTION X 1.SF% = TRUE COST PER DISH


Rename the Q factor the Smashed potato Factor to remember to only add the Q Factor to entrée items offered with the

semi -a -la -carte pricing structure

THE Q FACTOR AND THE SPICE FACTOR IN ACTIONAssume that the recipe cost for a dish, Salmon a La Griglia is $68.75, and the number of servings is 25. Using the spice Factor Percentage (10%) and the Q factor ($1.13) found earlier.The figure below demonstrates how the minimum menu pricing (MMP) formula is used.

Extended Price / Yield = Cost per Portion (CCP)$68.75 / 25 = $2.75 (Salmon a la Griglia)

Cost per Portion + Q factor = Cost per Dish (CPD)$2.75 + $1.13 = $ 3.88

Cost per Dish x 1.SF% = True Cost per dish (TCPD)$3.88 x 1.10 = $ 4.268

True Cost per Dish / Standard Food Cost % = Minimum Menu Price (MMP)

$4.268 / .30 = $14.226

Extended Price / Yield = Cost per Portion (CCP)$68.75 / 25 = $2.75 (Salmon a la Griglia)

Cost per Portion + Q factor = Cost per Dish (CPD)$2.75 + $1.13 = $ 3.88

Cost per Dish x 1.SF% = True Cost per dish (TCPD)$3.88 x 1.10 = $ 4.268


$4.268 / .30 = $14.226

Notice that the last line is completed in this example. When the True Cost per dish (TCPD) is divided by the standard (budgeted) food cost percentage, The result is a Minimum Menu Price (MMP).This is a starting point to determine actual menu prices. Using the food cost percentage to determine sell price is a very common menu pricing method.



CPP+ Q = CPD

CPD x 1.SF% = TCPD .44.40 X 1.10 = .44

TCPD/ FC% = MMP .44 / .30 = $14.226 $ 1.47

EXAMPLE USING THE CHICKEN NOODLE SOUP RECIPE

The Chicken Noodle Soup recipe can be used to demonstrate the menu pricing formula with no Q factor added. The end of the Cost Card is presented in the chart, with the MMP added

Extended Price / Yield = Cost per Portion (CCP)$10.00/ 25 = $.40

Cost per Dish x 1.SF% = True Cost per dish (TCPD)$.40 x 1.10 = $.44


$.44/ .30 = $1.4666, or $ 1.47

Below the MMP formula was used for the Chicken noodle Soup

Menu Item: Chili Dog Hot sand. #5

Yield: 1 serving Cost per Portion: .71Date: 8/2xxx Spice Factor: 10% True Cost Per Dish:

.781Food Cost % : 30% Min, Menu Price:

$2.37INGREDIENTS QUANTITY UNIT PRICE EXTENSIONAll beef, hot dog (8/lb.)

1 each $ 1.92 / lb (8/lb.) $.24

Rolls, Hot dog 1 each $ 1.25 / pkg. (8/pkg.) .16

Chili sauce (#10 can)

2 oz. $20.22 / 6 - # 10 cans .07

Pickle Chips (gal.)

6 each chips SF SF

French Fries 6 oz. $12.50 / 20 lb cs. .24Total $.71

EXAMPLE USING THE CHILI DOG RECIPE

Cost per Dish x 1.SF% = True Cost per dish (TCPD).71 x 1.10 = $.781

True Cost per Dish / Standard Food Cost % = MinimumMenu Price (MMP)

$.781/ .30 = $2.366, or $ 2.37

The chili dog as a complete meal has a plate cost of .71.Because all items are included in the plate cost, there is no need to use the Q factor.There is an allocation for the spice factor items, that would cover cost of condiments, onions, and everything served with the hot dog as well as the waste

RECIPE COSTING HOT TIP# 6 - 106. Cost is always going up. If at anytime you are using this formula and

your new answer is less than the previous line – STOP. This is impossible. If we keep on adding on factors to increase the cost, then the answers should demonstrate that fact. Recheck your work.

7. The Q factor has to be added on before the spice factor. Those recipes use seasonings, herbs and so on.

8. Always write out the formula line – by – line, as demonstrated. You don’t need to write out all the letters, just the math work. Doing so means you can easily check your work and you can spot errors quickly. Resist the temptation to write the computation in one string. When you do so, you cannot check your work or spot errors. Only use shortcuts after you have completely mastered the formula and its elements.

9. The beauty of the formula is that one line takes you right to the next one. There is no need to clear numbers out of calculators after each calculation.

10. For the most accurate results, run the figures through the calculator without rounding each line. The final answer is the place to round.

BUTCHER TEST A Butcher test is used to find the Cost per portion for menu items that

have loss due to trimming. The concept of butchering is to determine what is actually servable

after trimming. These menu items may be portioned cooked and served, or the item

may be roasted and only portioned after final cooking The butcher test is also known as a Yield Test and is the first method

used for doing a yield analysis. Using the butcher test, it is possible to make several determinations:

• The final amount of usable raw product• The cost of the product (both in portion cost & pound cost)• Yield percentagesFrom this point the product can be either:

1. Portioned, cooked, and served to the guest (as in a steak or an order of fish)

2. Cooked, then portioned only after the cooking process is completed (as in Prime Rib or some other roasted product.) In this case, the roasted product would also go through a Cooking lost test, to determine final cooked yields, final potion costs, and so on.

COOKING LOST TEST A cooking lost test is used for menu items that will

experience shrinkage, trimming and other loss during the cooking process.

These items are only positioned after cooking. Using these tools to determine cost per portion will ensure that product lost through trimming, cooking and portioning are calculated into selling price.

YIELD PERCENTAGES The yield percentage is determined by dividing the

whole (part/whole). Sometimes this is written as EP/AP or Edible Portion

divided by as purchased. The yield percentage tells how much of the whole

product (100%) is left to sell to a guest as the menu item Rib and thus generate dining room sales.

It is calculated by the following formula:

YIELD %PART

WHOLEWASTE PERCENTAGE

YIELD PERCENTAGE

100% - YIELD %

YIELD CONCEPTS

The PART is weight of the specific item trimmed The WHOLE is the weight is the weight of the entire

item is purchased The YIELD % tells how much of the whole is left to

sell The WASTE % tells how much of the whole is not

saleable. • Waste is not servable to a guest and is

factored into the portion cost.

HIGH PORTION COST A high portion cost will calculate out to a high selling price. This

price may not fit the profile of the operation. Here are some options:

1. Study the recipe or plate card for product substitutions or new products that decrease the portion cost but do not significantly change the item. Suppliers are very good resources. The rule here is not to change the taste or appearance of the item.

2. Decrease the portion size. This approach is always dangerous, especially if this is a signature dish or the operation’s reputation is about large portion sizes

3. Rearrange the plate presentation with new sides (and portion sizes), while decreasing the portion sizes. Then, give the item a new name. This can work well but must be done very carefully. In the case of a signature dish, this may not be an effective strategy.

4. Purchase a lower quality product. Generally, this is not the best interest of the business unless the ingredient is chopped up and mixed into something else or the level of quality purchased is too high for the product being produced.

GENERAL RULE: • If the item is the primary taste sensation,

do not touch the quality. If it is a product that is mixed in, research possibilities that include purchasing a substitute of lower quality

5. Confer with the employees. Use your staff as a resource. Their input may be valuable in identifying ways to eliminate waste or change a procedure that increase yield or decrease cost

Education

Chapter3