Small Business and Entrepreneurship
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Restaurants and Dining Establishments

How do you figure food costs when creating a menu?

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Answered 2011-09-13 01:33:12

List your total cost for the ingredient

List the unit measurement per bag, box, container. mg, ml, l, g, kg ect.

Use your recipe to determine the amount of ingredient you will use for the batch. As long as your recipe and product measurement is the same type, it will work for you. Otherwise, convert it to the same using a calculator on the internet. Search for the two types of measurements and the word calculator. Do the same for each ingredient.

Divide the cost of the product in cents by the unit measurement of your store bought bag, box, container ect.

If you have a 120g box of powder, and it costs $1 for the entire box, go, 100 / 120. You get .84. This means that each g is .84 of a cent. Confirm your calculation by multiplying the answer by the g. .84 x 120 = 100. You will get the cent value back.

Multiply the cost per unit measurement by the measurement of the recipe ingredient. So if you use 2 grams of powder in your recipe, the cost to you for this ingrediant is (1.68 cents) 1 cent and .68 of a cent. .84 X 2 = 1.68.

This is how much this one ingredient costs in your recipe. Do this for all ingredients and keep a record.

If you double your batch in your recipe, double the cost.

At the end, don't forget to divide by 100 to get your dollar amount.

You now know how much the full recipe costs. Now you need to determine the serving size. Fill plates to your desired bulk. Divide the number of plates by the cost of the full recipe.

Now you know core cost.

If you want to make a profit, you need to mark up the item to a profitable value. Compare to competition and adjust accordingly.

Good Luck!

Its easier to work out the price of a whole recipe using the above method then dividing it by the number of portions produced. Some items may have high food costs (lower retail cost) to make them sell, if so, you need to offer some cheaper items at higher price. Enforce the use of standardised recipes and re cost them once ever month for the expensive stuff and every couple of months for the rest. you can also slap overhead costs and a 'tolerance' (maybe 5%) on to account for slight seasonal changes and wastage.

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