Controlling food Costs
Controlling food Costs
How to get the most of your money
Raise prices to adjust to new food costs.
Cost out menu & price items accordingly.
Control portion sizes.
Minimize & track waste.
Spot-check prep staff ensure pre-cut portions
weigh what they are supposed to.
Link the chefs pay to a pre-set food cost %. Set up
an incentive deal for the chef.
Set up purchase order system.
Negotiate prices with vendors for bulk buying. Take
vendor discounts when offered.
Organize storage room & keep inventory to a min.
Purchase based on a budget.
A standard yield: expected qty. of
food that results from a standard
recipe. Stated in the total quantity
of food the recipe produces, such
as 3 gallons of clam chowder & by
the number of portions it produces,
such as 48–8 oz. bowls.
A standard portion: consistent
qty. of product served to each
person each time it is served.
Portion control tools: scoops,
ladles, a standard serving bowl, or
count promotes consistency and
customer satisfaction, and aids in
insuring a business’ profit.
Cost per Unit
Cooking Loss Test
Using 1 or up to all of
these will help
your plate cost.
Edible portion is the form in
which the product is served.
Little/nothing needs to be done
to prepare a product in EP form.
Ex: purchasing prepared cheese,
cake that needs only slicing; a
case of 6 oz. chicken breasts
needing only to be cooked; or a
case of 24–10 oz. bottles of
sparkling soda need only to be
opened = ex.of EP.
Foods portion cost of a prepared
item purchased in its EP form
need to use the Cost/Unit
PURCHASE UNIT COST # OF PORTION =
STANDARD PORTION COST
Example: The chef purchases a prepared
cheesecake for $8.00. Using the12-slice
portion, the Standard Portion Cost is
calculated as follows:
Purchase Unit Cost
Practice Part 1
Number of Portions
Standard Portion Cost
Yield test: process of raw product
purchased in “AP” form -broken
down into EP & waste.
Purpose = is to determine the
yield, the cost/lb, and the cost/per
portion of a product purchased in
an “AP” form. You break down the
product into useable product &
Ex. Food/beverage items: A case
of green beans), poultry (a turkey),
seafood or meat (10 lb. beef
tenderloin), canned (#10 can
chopped tomatoes), bottled (14 oz.
artichoke hearts), & frozen items
(5 gal. ice cream) prepared prior to
purchasing. Many products are not
100% usable & include some waste.
Calculate the Edible Yield %
Number of Portions
Edible Cost per lb.
AS PURCHASED COST / EDIBLE WEIGHT =
Green Beans: $38.00 / 22 lb. = $1.73/lb.
Edible Cost per Portion
Illustrates the relationship b/w EP & AP in % or decimal form.
This means that the EP Cost/LB is 1.095 x >AP cost/lb.
Practice Part 2
is .0203 x > than AP. = 20%
entire cost of the
recipe, the business
can determine the
cost and adequate
selling price, in
order to insure that
all costs in
preparing the recipe
are covered and
profit is realized.
1: Fill in the required information: name of the
recipe, standard yield, standard portion of ingredients
including garnishes from the standard recipes. Post the
AP price in the cost/unit column.
3: Determine Yield %: Look up in chpt.11 or book
Calculate the Individual Ingredient Cost.
Ingredient qty. x price = individual ingredient cost.
of yields if there is trim plug in edible yield % in form.
1/24 (12" x 20" x 2" pan)
1 lb., 4 oz.
2 gal., 2 c
12 lb., 8 oz.
(K) Green Pepper
(L) Bread Crumbs
(M) Sharp Cheese,
(H) Chicken Stock
No. of Purchase
Abbreviations used: lb – pound; qt = quart; oz = ounce; c = cup; gal = gallon; tsp = teaspoon
(total recipe cost)
(recipe yield - no. of servings)
See practice p 3
(per serving cost)
Fresh White Fish Dinner
Cost Per Serving
Fresh White Fish
Three Choices Daily
Four Choices Daily
Tossed Green, Caesar, Spinach
5 Choices Daily
Total Entrée and Accompaniments Cost
Perception is reality
Price endings of .99 more suited to qsr menus.
0 and 5 endings more suited for full service menus
Elastic vs. Inelastic
Flexible vs. Inflexible
Step 1: Determine the selling price multiplier by
dividing the budgeted food cost percentage into
food cost percentage
Step 2: Determine the menu item’s base selling
price by multiplying the estimated food cost by the
selling price multiplier.
(food cost for pork
price multiplier )
2 versions of the formula:
Food Cost (Total nonfood
cost Target profit)
Total # of Customers
Works for a la carte menu items as well as grouped items: soup,
entrée, salad, etc.
Uses operation-wide data to determine a $ amount that must be
added to each major menu item’s food cost.
Can use the same contribution margin for all items or use
Practice Part 4
Pricing Factor or Multiplier:
This formula gives a factor by which a food cost is multiplied to get a selling
Formula: 100% / Desired food cost = Pricing Factor
Pricing factor x Food Cost = Mathematical Price
Example: Food cost is $2.73 and the desired food cost % is 35%.
2.86 x $2.73 = $7.81
If food prices are rising
rapidly customers may
recognize the need of the
operation to raise prices.
In periods of stable prices
where other factors may
dictate increases customers
may not be as willing to
accept price increases.
Sometimes menu items are
removed and then brought
back in anew manner with
a higher price.
It’s not wise to raise all
prices at once.
Daily inserts for items that
have costs that fluctuate.