Food service engineering Flashcards
How to calculate increased portion size using %
• E.g. 1: Bread recipe for 6 portions 500g of flour, 60g of sugar, 30g of salt, 45g of yeast and 250g of water • Sugar= 60/500*100=12% • If recipe is increase to 24 portions (factor of 4) • 500 of flour X 4 = 2000g • 2000g*12%= 240g of sugar
• E.g. 2: Total weight of recipe = 885g • Sugar= 60/885 = 6.78% of total weight • If recipe is increase to 24 portions (factor of 4) • 885g X 4 = 3,540g • 3,340X 6.78% = 240g of sugar
What is the prefered increased size calculation method for baking?
by percentage as it is more precise
What are the components of calculation part of recipe costing?
Ingredients AP (as per purchased portion) EP (edible portion) % yield Purchase unit Conversion factor Cost of purchase unit
What is AP?
○ As per purchased portion (AP)
▪ The amount of food bought to give the number of the number of edible portions required to serve a specific amount of customers
Usually in weight/volume or portion size
What is EP?
○ Edible portion (EP)
▪ The amount of food after it has been processed (cooked).
▪ It is what is available to the customer to consume
Usually in weight/volume or portion size
How to calculate AP from EP?
AP= EP/(%yield/100)
How to calculate CF?
Conversion Factor (CF) = AP/purchase unit
How to calculate cost of recipe?
Add all cost of recipe ingredient of the recipe
How to calculate cost per pan
Cost per portion X number of portion per pan
How to calculate suggested selling price?
(Cost per portion + labour cost) X profit factor
Name pricing approaches (6)
- Nonstructured
- Factor method
- Prime-cost method
- Actual cost method
- Gross-Profit Method
- Stochastic-modeling approach
Describe non-structured pricing approach
- Simplest approach
- Examination of competition’s prices
- Similar price for similar items
- Not recommended
- However very often seen
What is a factor method pricing approach?
• Also known as fixed factor 1. Based on food cost 2. Calculation method: A. Calculate food cost of recipe B. Calculate factor: 100 / x where x = food % from budget or other determined % 3. Multiply food cost by factor Example If food cost is 43 cents and food budget ratio is 25% Then the factor is 100/25 = 4 Selling price = $0.43 x 4 → $1.72
What are the disadvantages of factor method?
- Real food costs are generally known only at the end of a period (month) – delay between the start of operation and coast determination
- A factor is applied to a product regardless of the fact it requires or not labor (uniform markup)
- Disregards perception of value
Describe prime-cost pricing approach
Based on raw food and labor (preparation) cost
Does not include service, sanitation or administrative costs
Calculation Method
1. Determine cost of food ($) (from standardized recipes)
2. Determine cost of labor ($)
3. Determine prime cost target (%)- Portion of food and labor cost of the selling price (arbitrary)
4. Selling Price = Food & labor cost X 100 Prime cost target
What does markup equal to in terms of prime cost target?
100-prime cost target%= 25%
What are the disadvantages of prime cost method?
- Requires accurate cost of food records
- Requires accurate cost of labor (very difficult)
- Represents a gigantic task when menus are extensive (eg: cycle menu and diversified menu)
What is Actual-cost method? (not the calculations)
• Also known as Recovery plus profit method
• ItistheEPcost+
1. Labour costs
2. Variable cost (to recover items such as hygiene items and paper)
3. Fixed costs (to cover costs such as rent, power, franchise fees etc..)
4. Profit margin
How is actual-cost method calculated?
- Labour costs + EP costs = X% (usually based on previous financial reports)
- Variable costs + Fixed costs + Profit = Y%
(usually based on previous financial reports)
x+y= 100 ALWAYS - Labour costs + EP costs = $z (66%)
- $Z / Z% = Price
Advantages and disadvantages of actual-cost method
ADVANTAGES
- Includes all costs
- Markup determined by Management
DISADVANTAGES
- Requires accurate cost records
- Time needed to collect the data and to do the calculations
What is gross profit method?
- Is intended to determine a specific amount of money that should be made on the basis of the number of guests served
- Based on previous experiences
- Cannot account for last minute variations nor should it count on temporary variations
- Therefore not very much used
What is stochastic-modeling approach?
- Is the only method to integrate all internal and external variables.
- Rarely used because of complexity