FOOD- AND BEVERAGE MANAGEMENT 2

COSTPRICING

September 2010

The Standard recipe

Standard recipes are a menu written out to produce and article always the same way.

All the precise weights of the ingredients

are specified as well as the quality. The way of preparation is also indicated. Normally it also contains a picture of the ready made menu

It enables the restaurant to calculate the cost price and it also serves to control costs.

Profit Profit is expressed as percentage of the selling price. (enables to control the profits)

Gross profit or kitchen profit is the difference between the cost of the food and the selling price of the food.

Net profit is the difference between the selling price of the food (sales) minus cost of food, labour and overheads

Example of the profit

Food sales for 1 week 8000 Food cost for 1 week

3520 Labour and overheads for 1 week 3440 Total costs for 1 week 6960 Gross profit (kitchen profit) 4480 Net profit

1040

Food sales – food cost 8000 – 3520= 4480 (gross profit)

Food sales – net profit 8000 – 1040= 6960 (total costs) Food cost +gross profit 3520 + 4840= 8360 (food sales)

Expresssion of the profit

Net profit is expressed as percentage of the selling price. The percentage profit for the week is:

Net profit x 100 = 1040 x 100 = 13%

Sales 8000

Breakdown

Food cost 3520 44% Labour 2000 25% Overheads 1440 18%

6960 Net profit 1040 13% Sales 8000 100%

Average price of a meal

If the restaurant served 1000 meals then the average spent by each customer would be: Total sales 8000 = 8.00

No.of customers 1000

As the percentage composition of sales for a month is now known, the average price of a meal for that period can be further analysed.

PROFIT As the percentage composition of sales for a month is now

known, the average price of a meal for that period can be further analysed:

Average price of a meal = 8.00 = 100% 1% = 8

Which means that the customer's contribution towards:

Food cost= 8 x 44% = 3.52 Labour = 8 x 25% = 2.00 Overheads = 8 x 18% = 1.44 Net profit = 8 x 13% = 1.04 Average price of meal = 8.00

The sellingprice of a meal A rule that can be applied to calculate the

food cost price of a dish is: When the food cost price of a dish equals 40% you can calculate the selling price at 100%

Foodcost of dish is 160 = 40%

Selling price is 160 x 100 = 4.00 40

The selling price of a dish Selling the dish at 4.00, making 60% gross

profit above the costprice, would be known as 40% food cost. For example:

Sirloin steak 250 gram 250 gram steak at 5.00 a pound = 2.50

To fix the selling price at 40% food cost = 2.50 x 100 = 6.25 40

Food Costing

Foodcosting must be controlled accurately

the food cost of particular items on the menu and the total expenditure of food over a given period worked out. Finding the costs helps to control costs, prices and profits

Disclose bad buying An efficient food cost system will disclose

bad buying and inefficient storage and prevents waste and pilfering.

This helps the F&B-staff to run an efficient business and enable him to give the customer good value for money.

The Restaurant who gives the customer value for money together with the desired type of food will be successful.

Good Stock Control is essential

Food is expensive, efficient stock control levels are essential to help the profitability of the business.

Main difficulties of Controlling Food Foodprices fluctuate frequently because of inflation, poor harvest,

bad weather, etc. Transport costs rise due to wage demands and cost of petrol. Fuel costs rise, which affects food companies 'and producers'

costs. Food subsidies imposed by govenments are removed. Changes occur in the amount demand by the customer;

advertising increases demand; changes in taste and fashion influence demand from one product to another.

Media focus on certain products which are labelled healthy or unhealthy will affect demand; for example butter being high in saturated fats, sunflower margarine being high in polyunsaturates.

Devise your own Control System

Each restaurant shoud devise its own control system to suit the needs of that establishment. Factors which affect this are:

Regular changes in the menu; Menu cards with a large number of dishes; Dishes with a large number of ingredients; Problems in assessing customer demand; Difficulties not using standard recipes; Raw materials purchased incorrectly.

Factors assisting a Control System

Factors assisting a control system include: Menu remains constant, (McDonald's,

Pizza Hut, Burger King); Standard recipes and purchasing

specifications used; Menu cards limited number of dishes.

Make your Stocktaking easy and your Costing more accurate

In order to carry out a control system, food stocks must be secure.

Refrigerators and deep freezers should be kept locked.

Portion Control must be accurate.

Bookkeeping system must be applied to monitor daily operation.

ORGANISATION CONTROL

Control in every organisation is crucial. The role of managers, either named Food & Beverage Managers, Executive

Chefs, Chef de Cuisine, SousChef, Head Chef is to organise:

Themselves;Their time;Other people;Physical resources.

Effective control A good organisation has effective control of

yourself, your subordinates, good physical resources including financial control. The way it is administrated varies per place. Successful control applies to all aspects of the hotel-and restaurant business, as follows;

Purchasing Storage Preparation Production Presentation Hygiene Safety Security Waste Energy Maintenance Equipment

Control of Resources The control of resources administration

depends on the organisation but also on the person who controls. He does not only need knowledge and experience but also respect from his subordinates. Do not forget respect is earned. It is given by the way the staff is treated.

Having earned the respect and co-operation of the staff the control system and checks need to be operated in a way that it is not disruptive in the operation.

Training and delegation

Training and delegation are required to ensure effective control,

It is essential to periodically evaluate the system to see that the recording and monitoring are effective.

Purpose of control

The purpose of control is to make sure:That required supplies are available;That supplies are the correct quality/quantity;That they are available on time;There is the minimum of wastage;There is no overstock;There is no pilfering;

Means of ControlSpontaneous Checks

No previous warning of the check, Regular intervals daily or weekly. These checks may involve one item or

several items. Records need to correspond with the physical items, for example if records indicate 40 packets of sugar at 1 kg, then 40x 1kilo packets need to be seen.

It is necessary to know to whom any discrepancies should be reported and what action should be taken.

The policy of the establishment should be clear to all members of staff.