FOOD COSTING

A Vital part of success in the food industry!

Who has the responsibility of controlling expenditure and checking food costs?

THE CHEF DE CUISINE

OREXECUTIVE CHEF

The final selling price of a plate of food must cover:

FOOD COSTS LABOUR PROFITOVERHEADS

Exact price of each ingredient

usedSalaries and

wages

RentElectricity

GasWater

The lower the other expenses the higher the

profit

FOOD COSTS• These need to be kept as low as possible.• Ideally they should make up between 30 and

40% of the final selling price• To calculate cost of each ingredient use the

following NB FORMULA:• Price / Units purchased X Units used• Wastage, pilfering and unwise buying will

increase the food cost percentage and decrease the final profits of the business

TO CALCULATE THE SELLING PRICE:

Use the following formula:

COST PRICE ÷ COST PRICE % X 100

[This mark-up should cover overheads and salaries and also allow for a profit]

GROSS PROFIT VS NET PROFIT?????

GROSS PROFIT

This is a false profit...

It is the money in the bank BEOFRE the bills are paidi.e.

Total Takings less FOOD COSTS only

NET PROFIT

This is REAL profit

The money in the bank after ALL the expenses have been paid –

Total income less total expenses