Food & Beverage Costing

Question 1

What is the importance of cost control?

Answer 1

• Calculate the cost of every portion of food or drink on a menu
• Calculate the selling price of all items and ensure selling prices are accurate
• Compare sales figures to the cost of sales to ensure that the require GP% is realised

Question 2

What are problems associated with food and beverage cost control?

Answer 2

• Raw material prices can fluctuate due to seasonality & demand levels
• The product is unlikely to be 100% consistent in quality or final yield
• Staff can’t work to 100% efficiency at all times
• Equipment used can’t work to 100% efficiency at all times
• Customer buying choices may not be as anticipated

Question 3

How do you calculate selling price?

Answer 3

Selling price = (cost pp / cost%) x 100
cost% = 100% - GP%

e.g. cost per portion is £2.46, GP of 60% needed
cost% = 100 - 60 = 40%

Selling price = (£2.46/40) x 100 = £6.15

Question 4

How do you calculate GP & GP%?

Answer 4

GP = selling price - food costs
GP% = (GP / selling price) x 100

e.g. Selling price of £2.50, cost of 30p
GP = 250 - 30 = £2.20
GP% = (220 / 250) x 100 = 88%