4.3.1 Calculating Food Costs Explained
Key Concepts
- Ingredient Cost
- Portion Cost
- Yield Percentage
- Food Cost Percentage
Ingredient Cost
Ingredient cost refers to the total cost of all the raw materials used in a recipe. This includes the price of each ingredient, including any additional costs such as shipping or handling fees. Accurate ingredient cost calculation is essential for determining the overall cost of a dish.
For example, if a recipe calls for 2 pounds of chicken breast, you would need to know the cost per pound of chicken breast to calculate the total ingredient cost. If chicken breast costs $5 per pound, the ingredient cost for the chicken would be $10.
Portion Cost
Portion cost is the cost of the ingredients used to prepare a single serving of a dish. This is calculated by dividing the total ingredient cost by the number of portions the recipe yields. Portion cost is crucial for setting menu prices and ensuring profitability.
An analogy for portion cost is like dividing a pizza among friends. If a pizza costs $20 and serves 8 people, each person's share (portion cost) would be $2.50. Similarly, if a recipe costs $30 to make and yields 10 portions, the portion cost would be $3.
Yield Percentage
Yield percentage is the amount of usable product after trimming and processing. This is calculated by dividing the weight of the usable product by the original weight of the product. Yield percentage helps in accurately estimating ingredient costs, especially for items like meat and produce that require trimming.
For example, if you purchase a 5-pound roast but only 4 pounds are usable after trimming, the yield percentage would be 80% (4 pounds usable / 5 pounds original = 0.8 or 80%). This means you need to adjust your ingredient cost to account for the 20% waste.
Food Cost Percentage
Food cost percentage is the ratio of the cost of ingredients to the selling price of the dish. It is calculated by dividing the portion cost by the selling price and then multiplying by 100. A lower food cost percentage indicates higher profitability, while a higher percentage suggests lower profitability.
An analogy for food cost percentage is like calculating the efficiency of a car. If a car uses 20% of its fuel to travel a certain distance, that's its fuel efficiency. Similarly, if a dish costs $3 to make and sells for $10, the food cost percentage would be 30% ($3 / $10 * 100 = 30%).