Documente Academic
Documente Profesional
Documente Cultură
Recipe Conversions
shrimp cocktail sells for $9.95, you can determine Irow rnany shrimp to serve by determining how much of llrnl price can be "spent" on the cost of raw ingredients.
tl l
Merchandising Determine the amount of ent'lr portion by evaluating what will look best, attract ullrrrlion, or fit. on or in'available serviceware. For
e!rnrrrlllc,
if the only
lhnl rrtrrount is multiplied by the customer count in order ftt r'ttkrttlate the total amount to produce.
proper portion size is one that has been determined following a thoughtful analysis of several factors: the type of operation or event, customer satisfaction, competition, food costs, and merchandising concerns. Each operation must determine its own portion standards, usually based upon a blend of
quantity, cost, and merchandising issues. Determine the amount of each f, item that the average patron would prefer to consume given the time of day or meal, the event, and the total selection offered. For example, fettuccine Alfredo can be portioned as a 4-ounce serving for an appetizer or a
Portion Size
Quantity
Exen'l:tc 2.1
Determine the amount of food that can be provided for the price charged, while still covering expenses and making a reasonable profit. For example,
Cost
catering company, is preparing 75 boxed lunelrer, wlrich will each contain a 4-ounce serving of fuit ralnrl, Another event scheduled for the same day lEludt's li'uit salad on a buffet designed to serve 150 ,Srtt, ltt t<ltal, how much fruit salad would you Stlelpnle tlrlt thc catorcr should prepare? Why?
20
21
F
CHAPTER 2
Recipe Conversions
Whether 6 servings or 60, every recipe is designed to produce a specific amount of product, known as yield. A recipe's yield may be expressed in volume, weight, or servings (examples: I quart of sauce; 8 pounds of bread dough; 8 half-cup servings). ff the expected yield does not meet your needs, you must convert (i.e., increase or decrease) the recipe by
converting the amount of each ingredient in the recipe.
Recipe conversion is sometimes complicated by pofiion size conversions. For example, it may be necessary
shortcuts by estimating recipe tttttounts or conversion factors. Inaccurate conversions lelrl to inedible foods, embarrassing shortages, or wnstcful excess. Take the time to learn and apply proper
Do not take
curr
vcrsion techniques.
to convert a recipe that initially produces 24 8-ounce servings of soup into a recipe that produces 62 6-ouncer
servings.
STEP 1:
Divide the desired (new) yield by the recipe (old) yield to obtain the conversion factor.
Cutting a recipe in half or doubling done almost instinctively. What mathematically when you do this?
New Yield
= Conversion Factor
Old Yield
S'I'EP
each ingredient is actually multiplied by .5.
2:
Although not all recipe conversions use such nice even numbers, it is just as easy to change recipe yields by uneven amounts as it is to double or halve recipes. The mathematical prinqiple is the same: Each ingredient is multiplied by a conversion factor.
22
ib,.,
CHAPTER 2
Example 2.1
Recipe Cbnversions
When calculating a conversion factor, the new enrl old yields can be in any unit (cups, ounces, pounds, Ftvings, and so on) as long as the numerator and the dettrtminator are in the same unit.
l-ll2
For example, in the cauliflower soup exercise, the slrne conversion factor can be obtained after first Onvcrting the recipe amounts to fluid ounces: 96fl.
oz.
=
1.5 gallons
.50
=.50
192fl. oz.
(Remember,
(Need help in changing fractions to decimal numbers? Please see your instructor for guidance.)
2.2
recipe you normally use produces tlute ohip cookie dough, but you need
What is the correct conversion factor?
6 lb. of t0 lb. of
24
25
iriliii
CHAPTER 2
Recipe Conversions
I tr
STEP
Determine the total yield of the existing recipe by multiplying the number of portions by the portion size.
STEP
2: x
Determine the total yield desired by multiplying the new number of portions by the new portion size.
Desired Portions
il
tttnrlc.
STEP
3:
Obtain the conversion factor by dividi the new total yield by the old total yield.
= Conversion Factor
Total Yield (Old)
STEP
4:
Old Quantity
27
CHAPTER 2 STEP 1:
Total original yield is 48 x 4 oz. =
192 oz.
Recipe Conversions
When a recipe's yield is increased, it sometimes het'orncs impractical to measure the new, larger quantilier hy cup, tablespoon, or the like, Your knowledge of lnFirsrrrcments will then be helpful in changing recipe ilrrruinrls into more manageable units. For example, the 4 l/.1 tluarts of chicken stock in the Cauliflower Soup rrtrove could be physical/y measured as 1 gallon fer'lf 'c plrrt I pint.
STEP 2: STBP 3:
432 oz.
432+192 =
STEP 4:
2.25.
Old ingredient quantities are multiplied by conversion factor to determine new quantities:
?
l=1,5
of
is the most
Old
quantity x
5lb.
4
1
CF
2.25 2.25 2.25 2.25 2.25
Cauliflower, chopped
Celery stalks Onion Chicken stock Heavy cream
2.3
Your recipe for Devil's Food Cake makes 2 mr ol'llatter. You need to make 100 cupcakes. Each :skc lirr holds 4 fluid ounces of batter. Find the
rll'tirlc conversion factor.
2 qt.
6 cups
'l'ltc only way to learn conversion techniques is pfncllcc, practice, practice. The review questions thlr set'tirtn arc iln opportunity to practice a variety of ltteltt rtnrl coltvr:rsion skills.
28
29
CHAPTER 2
Recipe Conversions
Recipe Errors A recipe may contain errors in Ittgrerlicnts or techniques that are not obvious when
plepnled in small.quantities. When increased, however, rnrall rnistakes often become big (and obvious) mistakes
Equipment
suffers. The only solution is to test fErlprs carefully and rely on your knowledge of sound ennhrrrg principles to compensate for unexpected pflltlrrtrs.
anrl tlrc l'inal product
Note that herbs and seasonings such as salt are fgely rnultiplied by the mathematical conversion factor Iltett r'rrlarging a recipe. In other words, if you increase I fer'ipc cight times you do not automatically increase lhe tlryrnc and salt in that recipe eight times. You should Ely irrstcud on experience and taste to determine how ffiUtlr ol'cach seasoning to add.
Tlme Do not multiply time specifications given a t'ecipe by the conversion iactor used with the
's ingredients. All things being equal, cooking will not change when recipe size or yield is gcrl, For example, a muffin requires the same ol baking time whether you are preparing one or 14 dozen. Cooking time will be affected,
vel',
Evaporation
changes in evaporation rate or heat 'liott cuuscd by changes in pots and pans or
hy
wAre.
30
31
r'
-- --
-'l
CHAPTER 2
Mixing time may change when recipe size changed. Different equipment may perform mixi tasks more or less efficiently than the equi previously used. Again, rely on experience and
judgment.
Exercise 2.4
2 oz. 4 oz.
1Tbsp.
make four times as many muffins. You convert t recipe properly but the batter seems much thicker normal and the mixing bowl you always use isn't I enough. The baked muffins are unacceptable and be served. What might have gone wrong?
t/2lb.
2-U2lb.
ll2
cr,tp
Summer Squash
4 servings
Equash 3 cups
MIk
Buttcr
Ealt
ll4
cup
2 Tbsp. 1 tsp.
1/4 tsp.
Pagrika
92
33
CHAPTER 2
3. Vanilla Sauce
CHAPTER 3
t2
8 oz. 1 qt.
Mitk
Vanilla
Convert recipe to yield
6og
1300 g
Flour
Salt Sugar
3og
120 g
Milk Powder
Shortening Butter
Eggs
20 l-ll4
ounce rolls.
LEARNING OBJECTIVES:
Understand how to calculate unit cost
5.
List and explain three things that can affect successful recipe
changes.
Understand and use typical invoices Understand how to calculate the cost of a recipe Undcrstand how to calculate portion cost
05
CHAPTER 3
.30
=.018 x
t6
Etercise 3.1
2=$0.037
Flntl the unit cost for each item:
The following exercise will help you unit costing procedures and provide additional with measurement equivalents
ltem
A.P. package
50# bag
Cost
Unit Cost
lb.
flour, cake
t|.20
Beans, fresh
28# bushel
20.72
lb.
I .
UNIT COST
of
Tonrnto puree
#10 can
3.10
cup
2.30
gallon
9.45
cup
50# bag
4.40
Tbsp.
cratel12 bunches
17.40
bun
25#bag
14.00
lb.
36# case
42.70
flaU9 heads
16.25
ea.
38
39
I$llffit,
CHAPTER 3
Cost information is usually provided to the c
or manager on purchase invoices, such as the ones sho on the following pages. It may also be necessary examine a product's label or package to determine so information such as size or weight.
Exercise 3.2
I
to determine
$
r!c*
B*H*
Es 80
s
EI E;
*sl*
j
$ ln fl u 6 N
!8. *
EiHil per bun per each per each per cup per oz.
o
Potatoes
Parsley Apples
IT H: df<E !fE il
,:> 1F
I d,,
,iE
Fg
o
E
8r
ffilr
fiEs o o o
3E " tr o
6 o
6 $
I
o
N
r)
6 IJN
uc trl
d o
WOG Fryers
Sugar
per lb.
:rO
lJ
EE .r
4 PHri. ''(lit
t
i
E
8; lrl U
Tea
per servmg
TTTg
i
B
40
41
Bffil
2
E)
Recipe Cost
standard recipe, listing"the ingredients and Iheir amounts as well as the number and size of the porlions, must be established in order to determine the gurl of the completed menu item. Once an accurate 'the Total Recipe Cost is calculated ftei1rc is written, Pitlr the following two-step procedure: Determine the cost for the given quantity of each recipe ingredient using the unit costing procedures described previously.
F.
t&
o
H
o
Fr
J
tr
o
E.
E
Ei
fr:
,l
ts
e"
*
Xs zo
QA I rU
tqa
I
>HO
xL) 6
HE
Add all of the ingredient costs together to obtain the total recipe cost. The total recipe cost can then be broken down llrc Cosl per Portion, which is the most useful Ior food cost control. To arrive at cost per por, rlivide the total recipe cost by the total number of or portions produced by that recipe.
z z o F x t!
I lr lr
o o v
t
N
o o
i o
o
E E
<a a <t\ us tss 4/6 >D !H ZA LgN o<N t6< <a< ,ryx ,aF Z<* 4 UilU OZZ >6E-u u,rJ fJo ,n,ag 4uL
o
B P
3 o
44
45
The
ild
served or so:
rers. In other words, if pecan service, the recipe cost should ,curate portion cost. Dividing , servings or by'10 servings nformation.
lixercise 3,3 shows the ingredients for Bn onlon I lse the unit costs calculated in Exercise 3, I to te the recipe costing form. (Note that the eol,f'etr "yield Vo" and "8.P. price" are not used in eterrise.)
i.3
RECIPE COSTING FORM
Identify at least rwo orher reasons why it is i portant to use a standard recipe in a professi
frrm ffro I
oate
lO-l?
taOtor-r
po*ionSize
(o
or.
The Recipe Costing Form provided in the pendix is useful for organizing recipe costing infi tion. It provides space for listing each ingredient, quantity of each i'rgredient needed, the cost of each and the total cost for each ingredient. portion size cost per portion are listed at the bottom of the fr There is no space for recipe procedures because they irrelevant in recipe costing.
When using this costing form, remember information you write in the Quantity column is m tiplied by the amount you write in the price column determine the Recipe Cost for each item. The costs the ingredients are then totaled to determine the T
Recipe Cost.
46
47
F'
CHAFTEH 3
Unlt and
Labor Costs
The term direct labor refers to the work that directly involved in the production of menu items. example, the time that a cook spends cleaning Your manugcr wants to make all dinner rolls in-
, t:kr
irrstoacl
frosting a cake or shucking oysters would be direct used in producing those foods. The labor required
clean the parking lot, balance the cash register, inven the wine cellar and so on is indirect labor.
yorr
The cost of direct labor should be when costing menu items. If food is purchased processed, cleaned, portioned, and ready to heat serve, labor costs will be low. The more in-house essing needed, the more labor costs will increase. some point, the money saved by buying wholesale of meat or making your own stocks may be outwei by the costs of labor needed to produce those items. example, if a prep cook works slowly and takes too to clean a beef tenderloin, the chef may decide it be less expensive to purchase the tenderloin cleaned and portioned for service. The labor expense
that cook could then be eliminated.
'l'lrc cxpense for direct labor is added to food cost lftivr irt a figure known as prime cosl, which is the
cnst ol'preparing a food item
for sale. Prime cost is rusecl when setting menu prices, as described in J, Menu Pricing.
48
49
i.
,.i-,.
Ymm
Why is it important to calculate the portion cost of a recipe in professional food service operations? Why is the cost of the recipe alone
lnadequate?
Explain how the cost of a small quantity of an ingredient can be determined from the known cost of a large or bulk quantity of that ingredicnt.
51
ldffiiH,
CHAPTER 4
Yield Tests
lngredient Yields
Computing the cost of recipe ingredients is simple matter if foods are used the way they are recei and there is no waste or trim. This is rarely the however. The amount of a food item As-Purc (A.P.) and the amount of the Edible Portion (E.P.) of same item may vary considerably, particularly meat, fish, poultry and fresh produce. In this con yield. refers to the usable or edible quantity remaini after processing the as-purchased quantity of a item. That is, yield refers to the amount of usable after the case of iceberg is cleaned, or the amount meat that is available after trimming.
*ttttiques vary from operation to operation, there are no pGcise, standard yield amounts. Each kitchen should
ftterrrrine its own yield factors using its own cooks and lll uwrr cleaning and trimming standards. To be ftttmle, several tests should be conducted and the f;tults lveraged to arrive at a specific operation's yield
Iur each item.
'fhe method of calculating yield varies depending Wlrethcr the item's trim is all waste (for example, lnhlc peelings) or whether the trim creates usable or le hy-products (for example, meat and poultry). l:hapter examines both types of yield tests and lrow this information is critical in purchasing
factor or yield percentage is the of the usable quantity to the purchased quantity.
The yield always less than IOOVo and may be calculated in dol or quantity (weight/volume) amounts.
By-Products
'l'lre simplest yield test procddure is for items that nu usable or saleable by-products. These foods
?
case
nrlst produce as well as some fish and shellfish. tltese lilods are ready to serve as received from rr, trimming is required and all trim is waste. l*etttple, one pound of apples may yield only 13 ol' llesh after peeling and coring. If a recipe otte pound of peeled, cored apples, the chef ttarl with slightly more than one pound of A.P. In uruler to determine accurate costs for such
55
54
CHAPTER 4
items, the trim loss must be taken into account. E seedless grapes do not have a l00Vo yield factor. weight of stems and bad grapes should be calculated deducted from the A.P. weight to determine the co price per pound of servable fruit. Three steps are used for calculating yield all trim is waste:
Itltrle that the yietd factor will always be some number btl than 1 and the yield percentage will always be less
Yield Tests
fim
1007o.
STEP 1:
Weigh
STEP 2:
Subtract the trim loss from the weight to arrive at the total yield wei
STEP 3:
the
Practice calculating yield factors by completing ise 4.1. Remember, subtracr trim loss from A.P. ; lhen divide yield weight by A.P. weight to arrive yicld percentage.
Example 4.1
generates
ounces of trim loss. Therefore, the yield weight 1/2 ounces and the yield factor is86Vo: (2 lb.
16
oz.)
32 oz.
4.5 oz.
27.5
27.5
=
32
.859
86Vo
66
67
M-,
CHAPTER 4
Exercise 4.1 tlharr
Yield Testg
4,1
CTIMMCIH PRODUCE
YIELD IhCTORS
Item
A.P.
Trim
Loss 5.5 lb.
Yield
W
14.5lb.
w
759o 94Vo
Grapefruil
45Vo
9Aclo
Pears
Pea
75Vo
9Ucla 82%o 5OVo 95%d
Broccoli
27lb.
10Ib. 10 oz.
48Vo 75Vo
t8-U4lb.
Cucumbers
3lb.
12
oz.
70%
2l
oz.
95%
7OVo
8.5 lb.
8O7o
78%o
pods
8A9o
5O%o
Peppers
Pineapple
45Vo
75c/o
45cno
Plums
Potatoes Radishes Rhubarb Scallions
80% 90%
85To 65Vo
55Vo 90Vo
22lb,
Onions
Leeks
4 oz.
55% 75%
Nectarines
867o
Spinach
6A%
9A7o
9OTo
XJ%b
3lb.
19 oz.
82%
2E%
Tomatoes
Squash
Tomatoes
Zucchini
cleaning and trimming raw should be personalized. Lists of common such as those given in Chart 4.1, are aval as an indication of industry nerrns.
products,
tt*
to Chart 4.1 , 7U%of the broccoli you 30% is waste; 637o of all scallions ic waste- Depending on your eleaning standarlls, and purchasing
lhorc percentages
(,Ircr8tion.
6E
60
hd*,
CHAPTER 4
Yield Tests
$xantple 4.2
Carrots cost $6.50 per 25-lb. bag and have a fielrl l'actor of 78Vo; in other words, 22Vo of that 25-lb. beg ir waste. So, the carrots have an E.P. unit cost of
tty
pcr pound.
.26lpound
=
.78
.33lpound
(as-purchased)
converted to an E.P. (edible portion) unit cost. done by dividing A.P. cost by the yield percentage.
lixercise 4.2 allows ybu to practice calculating trvisod E.P. cost of food items that have no usable or hy-products. Use the yield factors listed in Chart
to complete this exercise.
, I
ru,
00
61
CHAPTER 4
Exercise 4.2
Yield Tests
Yield
Vc
E.P. Cost
.70Ib.
Avocado slices
Banana slices
leces
74Vo
t.29tb.
_37Lb.
Srunple 4.3
shredded cabbage. Tlre yicld factor for cabbage is79Vo. Therefore, 20 lb. is fgtf,, rrl'the A.P. quantity. Divide the amount needed by &e yield factor to determine the minimum A.P. quantity.
.89Ib.
Yams, diced
20Ib.
= 25.3lb.
> To Determine Purchase Amount
Most recipes list ingredients in E.P. Therefore, the chef must consider waste or trim when ordering these items. If the amounts listed in recipe are ordered and then require trimming, number of portions (or recipe yield) will be less than
desired amount.
.79
63
FF t'
CHAPTER 4
Yield Tests
t a
chasing quantities for items having unusable t Remember that yield factors are listed in Chart 4.1.
With meats, poultry, and some fish, only a small lBlount of trim will be discarded as waste. Much of the. Elnr can be used and therefore has a value to the gp+nrtion. Calculating yields on food items with usable ff rtrlable trim is a bit more complex than calculating |leltls fbr food items whose trim is all waste.
the. food service operation purchases only ffirtttt, portion-controlled meats and seafood and uses Senr .iust as they are received, A.P. and E.P. costs are r.lnle. But if the operation buys wholesale cuts of or whole fish and poultry and cuts them in-house, ehef should do a yield cost analysis to determine the
I costs.
If
Exercise 4,3
Recipe
Item
Amount
3 lb.
A.P. A
74
Avocado slices
Banana slices
leces
r-U2tb.
5.75Ib.
lcnting food items can become a major expense for a tcrvice operation. Although labor costs should be when making purchasing and production
actual
in
2tb.
22-2t3lb.
807o
Yams, diced
4.4
Suppose your restaurant serves a boneless, lers grilled chicken breast entr6e. The restaurant wholc tiyers for $1.07 per pound. You must clean ehickons by removing the breast meat and skin, and lng the wings, legs, and thighs. You begin with a 65
64
F'r'
CHAPTER 4
Yield Tests
of
products, subtract that amount from the original cost the chicken as-purchased. This figure reflects the cost of the 10.5 pounds of boneless, skinless
meat.
if the
$37.45
14.95=$22.50
To find the cost per pound for the breast meat, divide net cost by the tested item's yield weight. This is figure you will use for costing chicken breast recipes.
$22.50
Percentage of increase is determined by di the net cost per pound by the A.P. price per pound. that this figure is almost always greater than l)OVo.
$2.14+ $1.07=2007o
The percentage of increase figure is used the next the operation purchases chicken but finds that the has changed. Instead of completing another yield the new cost per pound for chicken breast meat determined by multiplying that new price by percentage of increase. So, if the cost of whole chi rises to $1.85 per pound, breast meat will cost $3.70 pound:
$1.85x200Vo
= $3.70
t'orrsidered, especially if the food portion is rincd by weight after cooking (for example, sliced hcr:l' for sandwiches). Once again, several tests I hc conducted to obtain reliable yield factors for olrcration. As-Served (A.S.) refers to the actual lt ol'one portion as it is served to the customer. If a is scrved raw, such as fruit, the as-served weight he thc same as the edible portion weight. If the food rkctl. however, these weights will be different.
('lritrt 4.3 is a Cooked Yield Testing Form used detelrnirring cooked cost per pound and percent of knp.e. Rcmcmber that cooked yield tests are only
68 69
F'
CHAPTER 4
necessary where A.S- portions are based on weights
Yield Tests
Chart 4.3 is filled in with the results of a cooked |leld test on a roasted boneless turkey breast. Assume fhat a raw yield test has already been conducted on the
cooking. ff, for example, saut6ed shrimp is order based on aGoz. uncooked portion, a cooked I test is not necessary- If, however, large quantities shrimp are cooked first, then portioned for cooked yield test must be completed to determine
actual cost per portion.
Chart 4.3
COOKED YIELD TEST FOR]Ii
n"-
Trrr\ Br<o-r}
l3 lb.
o.,.
iletGosr
Netweight
iletcostperpound + S"rc
Erkey breast, providing the net cost and net weight tgurcs. The weight as served is calculated by keeping Eae k of the number of portions actually served from that Brkcy and multiplying that number by the portion size. *hite it is tempting to simply weigh the turkey after ing and trimming, this fails to account for loss igused by employee snacking, wasted scraps, crumbs hft on the cutting board or slicer, or spilled juices. It is hore accurate to record the weight that is actually
The remaining lines on the form are completed your calculations, just like on the raw yield test , The cooked cost per pound is the net cost divided the A.S. weight ($Sq.+O + 15 lb. = $3.96).
g6
PercentofShrinkage 17
Shrinkage
3 rb.
Shrinkage refers to the loss from pre-cooked lght to as-served weight (18 lb. - 15 lb. = 3 lb.). The of shrinkage figure is the ratio of shrinkage to weight (3 lb. + 18 lb. = lTVo). It is used to assist chef in determining future purchasing needs. For le, if the chef knows that roast beef has a l2Vo
kage factor, she knows that the pre-cooked weight be lTVo more than the weight needed after cooking. Total percentage of increase shows the increase co$t per pound from purchasing to service. It is luted as a follow-up to a raw yield test by dividing cooked cost per pound by the A.P. cost per pound.
70
71
CHAPTER 4
l{r'umple 4.5
Yield Teste
Refer to the chicken breast example in Chart 4.2 Enrl assume that you need 43 lb. of raw chicken breast
ntrirt for a dinner party. The raw yield factor is 30Vo ( 10,5 + 35 = .30). So, you must purchase at least 143l/l lh. of whole chickens to have the 43 lb. of breast ntrirt needed(43 + .30= 143.33).
Htrrcise 4.4 Return to the sliced turkey example above and Itriurne that you need to make 75 turkey sandwiches, aclr containing 4 oz. of cooked, sliced turkey. If you *nrrw that a24-lb. turkey produces 18 lb. of raw turkey brerrst, how many pounds of whole, raw turkeys will you flectl to buy to have enough breast meat for the
!Fttrlwiches?
STEP E.P.
1:
A.P.
Yield Percentage
STEP 2:
I i
A.P. =
E.P. = A.S. =
As-Purchased
Edible-Portion
As-Served
E.P. Quantity
Yield 7o
A.P. Quantity
72
7g
F
CHAPTER 4
Yield Tests
Employee Skills Do your employees the skills necessary to butcher meats properly? fabricate fish? To clean and prepare consistently? How much will hiring skilled labor
Do you have a use for the bones, and trimmings that result from fabricating large cuts meat into individual portions? Can your menu depending on the seasonal availability of fresh p or shellfish?
YIIJLD FACTOR
Menu
fl,'MING
LOSS
What is the purpose of the Percentage of lncrease figure on the raw yicld test form? How is this figure used by the chef?
customers expect produce and custom cuts of rneat? Do they desserts made "from scratch"? Are they willing to for additional labor costs?
Customers Do your
l.ist several factors that might cause one restaurant's yield factor for lcttuce to be higher than another restaurant's. Explain why rtandardized yield factor lists are unreliable-
75
Menu Priclng
lixample 7.1 After determining the cost of food items, you more intelligently and accurately calculate menu pri A few of the many methods for setting menu prices explained below. Some techniques are highly struc and closely related to food costs; others are unst and unrelated to actual food costs. As a practical no one method is right for every operation and combination of methods may provide the best pri
strategy.
the cost for one sandwich is $1.70 and the desired food cost percentage is ZiVo, the selling price
nrust be at least $7.39
If
Irr this situation, 23Vo of the sales price for each nrndwich will go to cover the cost of ingredients. The higher the food cost percentage, the lower the portion of lhc sales price that is available for fixed expenses, ovcrhead or profit. Determining the appropriate food cost percentage for your facility is critical to the
tuccessful use of this method.
Exercise 7.1
Food Cost Percentage For this you must first determine the food cost desired for the particular operation. Calculate item's raw food cost, then divide by the desired
cost percentage to determine the selling price.
Your manager has determined that food costs rhrruld be no more than 28Vo of sales. What should you Ehurge for a bowl of onion soup if the recipe cost is f t , tZ per portion ?
Factor Pricing
variation on food
cost
Pcrcentage pricing is factor pricing, in which a multiplier h used to calculate menu prices. First, take the desired
then
multiplied by this cost factor to arrive at the menu price. Uaing the figures in Example 7.1, the factor is 4.35 (100
109
4.35) and the menu price for a $1.70 ($1.70 x 4.35 = $7.3e). $7.39
+ 23 =
as
What factor is used to set menu prices with 28Vo food cost?
Both food cost percentage and factor pricing fast and easy to use. These methods are unreliable, however, because they assume that costs associated with preparing food stay the same each menu item. These systems wrongly assume that costs for labor, energy, and overhead are the same rack of lamb entr6e and a seafood salad. These may be fine-tuned somewhat by adjusting the food cost percentage according to the type of food menu category. For example, appetizers may assigned a lower food cost percentage than dessertg,
,
service
lndustry uses a figure known as prime cost to refer to the btsl of raw food cost plus direct labor. Direct labor is lnbor actually required for an item's preparation. If, example, food cost is $2.10 and direct labor is $1.50, prime cost is $3.60. As with the food cost rcentage example above, the prime cost percentage he divided into the prime cost amount to determipe pnce.
side dishes.
DIRECT
LABOR
110
1ll
Menu Pricing
*i
Example 7.2
The raw food cost for a rack of lamb is $7.50 takes a cook a total of 9 minutes to clean and trim
it
information and experience, you can determine how much to spend on raw product for each menu item and still make the desired profit. This method is most useful lbr standard food items or in markets that are highly
competitive.
for service. If that cook is paid $8.50 per hour, the di labor cost is $1.27 ($8.50 per hour = $.14 per mi ($.'1a x gminutes = $1.27).
The prime cost of the rack of lamb is $8. ($7.50 + $1.27). A selling price is then determined dividing prime cost by the desired prime percentage. If the desired prime cost percentage is the rack of lamb should be priced at $18.27 ($8.22 .48 = $18.27).
Ilxample 7.3 Assume that the market price for a complete c:hicken dinner is $9.95. Assume further that the desired profit is '|Vo, overhead expenses are 27Vo of sales and
lrrhor is 23Vo of sales. You can then spend 43Vo of $9.95 ($4.2S; on the food cost for that chicken dinner.
7+27+23=5l%o
100
Excrcise 7.3
backwards way of setting prices based on perceptions of appropriate prices. You first what the "market price" is for the same or similar Then calculate what you can serve for that price. This technique requires a thorough knowledgc the market and complete, accurate historical infl on labor and overhead costs. With the
Your competitor serves a complete shrimp dinner ftrr $12.99. You would like to meet this offer, but you're not sure you can afford to. You know that your vcrhead accounts for 38Vo of sales, labor is 34Vo of lBles, and your desired profit margin is l2Vo. How much een you spend on raw food cost for a $12.99 shrimp dlnne r'l
112
113
F
Profit-Based Menu Pricing
Unlike cost-based pricing methods, profitmethods tse desired profit as the starting point calculations. The two methods discussed here are profit pricing and budget-based pricing.
'l'he average gross profit per customer is $2.80 ($80,000 + 28,500 = $2.80). If the average per person food cost Ior a salad bar is $2.10, the menu price for that salad
shouldbe$4.90 ($2.10
$2.80
$4.90).
lixercise 7.4
produced by each customer. So, there must be a history for the facility before this method useful. The average gross profit per customer is determined by dividing total gross profit by the number of customers during the given period. If, example, total gross profit for the first year of was $120,000 and a total of 40,000 covers were during the year, the average gross profit per was $3.00. So, $3.00 is added to the food cost for item to determine the menu price.
{
The average per person food cost for your lrunday buffet is $6.45. During the past year a total of
5200 people purchased this buffet and your gross profit wts $31,500. How much should you charge per person il'you wish to maintain that profit margin?
Budget-Based Pricing Budget-based pricing huilds atarget profit percentage into the selling price of ench menu item. As with gross profit pricing, there must
he a history of expenses to use this method. The desired
t t'!
I
!
120,000
t ii
menu
prol'it percentage and the historical percentage for ovcrhead (total labor, fixed expenses, and so on) are
from l00%o. The percentage remaining is the nnlount available for food costs. A factor is determined by dividing this food cost percentage into 100. The arlunl food cost for each menu item is then multiplied by
ntrlrtracted
I
3
I
t
This pricing method is probably most useful for prh or buffet operations where food cost is also averaged,
i
t I I
i
I
Example 7.4
114
115
Menu Pricing
Example 7.5 for special or loss-leader items such as aT9Qjumbo soda
or a $1.99 breakfast special.
If the desired profit is lTYo of sales and expenses historically total 60Yo of sales, then the cost percentage must be no more than2}Yo.
. 100-(60+12):28
Dividing 28 into 100 provides a pricing factor of 3.57 the raw food cost for a Chicken Caesar Salad is $2.
,
While the competition's prices are an important consideration, you should not simply copy them. Your competition's costs are not your costs no matter how similar the final food product appears. If you must charge higher prices than your competition, seek out some way to dffirentiate your product or your service. Virtually all food service operations are seeking to charge the highest price possible without a loss of sales. The customer's perception of value is therefore critical. The menu can be used as a tool for educating customers. Descriptive language or an explanation of unique or special dishes can be included. Customers who understand the value of service, atmosphere, out-ofscason foods, and specialty products
$2.59x3.57:$9.25
Exercise 7.5
Your bakery a shopping mall extremely high rents. Consequently, your total averages 75% of sales. Your food cost for one cranberry muffins is $1.04. If you want to make profit, how much should you charge for one
muffins?
Non-cost-based pricing techniques rely on monetary factors in setting menu prices. prices in your area for the same or similar items affect your ability to set prices. fhii is particularly
t,
I or 5 appeal to price-conscious
-116
117
Menu Prlclng
expensive and of higher quality and so are often used fine-dining menus. The number of digits in a price is also im $10 Likewise, theftrst numeral in a price affects perceptio When changing menu prices, an increase from $5.95 $6.45 seems greater than an increase from $6.25 $6.75, although both are 50p increases. Patrons do not like to see a large spread in prices. Erratic pricing may cause confusion or customers think something is wrong with one or more the items. For example, a lobster dinner for $18.50
2.
Calculate the menu price for a chicken salad with a raw food cost of $1.97, where the desired food cost is 23Vo. How might this price appear on an upscale restaurant's menu?
be a reasonable price, but it may be inappropriate on menu where all other items are less than $6.00. general, the highest price should not be more double the lowest price within the same food cate ff the least expensive appetizer is $4.00, then the expensive appetizer should not be more than $8.00.
3. During June your restaurant will offer a complete shrimp dinner for a special price of $8.99. Explain how you will determine the
Exercise 7.6
appropriate cost for the raw ingredients for this meal. What other information do you need?
Your accountant accurately calculated all menu prices based on information you provided.
prices show figures such as $6.12, $9.00, $8.57 $1.19. Use your knowledge of pricing psychology adjust these prices to more appropriate figures explain your reasoning.
118
119
4.
The five appetizers on your lunch menu are priced from $6.50 $7.95 each. Your manager wants to add a new appetizer priced $2.95. Explain why you disagree with this idea.
5.
Why might be important to know the labor cost associated with preparing a given food item? Explain how prime cost percentage differs from the food cost percentage.
it
120