20 Questions
What percentage of the cost centers in Food Service is attributed to Labour Costs?
32%
What is the formula to calculate the Cost of Food Sold?
Cost of opening stock + cost of purchases - cost of closing food stock - credit return - staff meals
What is the purpose of 'Taste and place' in the steps of costing a recipe?
To involve front of house staff in the testing process
What is the term for the costs associated with getting the plate of food to the customer, excluding normal kitchen costs?
Surround cost
What is the formula to calculate the Total Cost of an item?
(Unit Cost/Unit of issue)*Quantity
What is the process of selecting, costing, pricing, and evaluating menu items called?
Menu engineering
Why is it important to use invoice prices when costing recipes?
To ensure accurate costing and accounting
What is the purpose of calculating the value added tax?
To calculate the recommended selling price of the dish
What is the term for the difference between the net sales and the cost of food sales?
Gross profit
What is the purpose of revising, reviewing, and correcting the recipe during the costing process?
To ensure that the recipe is accurate and standardized
What is the primary goal of categorizing menu items based on popularity and profitability?
To identify which dishes to feature on the menu
What is the formula to calculate the selling price of a dish?
Food Cost x 100 / (Food cost %)
What is the purpose of menu planning in a restaurant?
To outline the style of cooking and its impact on the kitchen design and financial outlay
What is the rule of thumb for allocating space to the kitchen and associated stores?
1/3 of available space
What is the ideal number of touches to a plate in a restaurant?
3-5
Why is it important to know your customers in menu planning?
To plan the menu according to their preferences
What is the purpose of carrying out a detailed location analysis?
To evaluate the competition
What should be considered when planning the menu to prevent waste?
Watch for uneaten garnishes and plan waste into the menu
Why is accurate costing important in menu planning?
To lead to accurate pricing
What should be included in the menu planning process?
The allergen information and supplier needs
Study Notes
Cost Centers in Food Service
- Net profit before taxes: 19%
- Food Costs: 25% (food and drink)
- Labour Costs: 32% (wages, salaries, pensions, staff meals)
- Overheads: 24% (rent, insurance, maintenance, professional, printing/stationery)
Cost of Food Sold and Gross Profit
- Cost of food sold = cost of opening stock + cost of purchases - cost of closing food stock - credit return - staff meals
- Gross profit = net sales (net of VAT) - cost of food sales
- Net profit = gross profit - labour and overhead costs
Steps in Costing a Recipe
- Discuss whether a recipe suits your concept
- Test the recipe, considering labor content, utility costs, and impact on front of house staff
- Allow for wastage on all dishes
- Revise, review, and correct the recipe as necessary
- Photograph the dish for the kitchen manual
- Write the recipe in standard format
- Cost the recipe using current invoice prices
- Calculate the selling price (net price) based on market forces
- Calculate value-added tax/sales tax based on net price
- Add value-added tax/sales tax to net price to get the recommended selling price
Menu Engineering
- Selecting, costing, pricing, and evaluating menu items
- Categorizing menu items based on popularity and profitability
- Calculating cash contribution in food costing: take the cost of the dish and multiply by a factor to receive a certain margin
- Selling price = Food Cost x 100 / (Food cost %)
- Gross profit = Gross profit x 100 / (Selling price)
- Food cost % = food costs x 100 / (Selling)
Menu Planning
- A badly planned menu creates multiple problems across the business
- The menu impacts every other decision and the management of the operation
- Consider the style of cooking, market, and kitchen size when planning the menu
- Plan the menu to use ingredients across many dishes
- Design side orders and accompaniments to be used across multiple dishes
- Watch labor content and required skills/knowledge
- Avoid creating bottlenecks in the menu
- Aim for low input/high return menu items where possible
- Keep in mind the optimum number of touches to the plate (3-5)
- Menus can be planned to need a trained chef or competent cook
- Know your area, customers, and local business environment
- Carry out a detailed location analysis
- Check competition
- Design to prevent waste, avoid roasts, out-of-season ingredients, and uneaten garnishes
- Plan waste into the menu
- Ensure staff are trained to prepare food in a non-wasteful way
- Offer a balance of dishes, including a signature dish
- Include allergen information and consider supplier needs
- Pricing strategy is influenced by many factors, including location, business model, competition, costs, and seasonal, local, healthy, ethnic, and plant-based considerations
This quiz covers the different categories of cost centers in the food service industry, including food costs, labour costs, and overheads. Learn how to calculate cost of food sold, gross profit, and net profit.
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