FOOD COSTING
A Vital part of success in the food
industry!
Who has the responsibility of
controlling expenditure and checking
food costs?
THE CHEF DE
CUISINE
OR
EXECUTIVE CHEF
The final selling price of a plate of food
must cover:
FOOD COSTS
Exact price of
each ingredient
used
LABOUR
OVERHEADS
PROFIT
Salaries and
wages
Rent
Electricity
Gas
Water
The lower the
other expenses
the higher the
profit
FOOD COSTS
• These need to be kept as low as possible.
• Ideally they should make up between 30 and
40% of the final selling price
• To calculate cost of each ingredient use the
following NB FORMULA:
• Price / Units purchased X Units used
• Wastage, pilfering and unwise buying will
increase the food cost percentage and
decrease the final profits of the business
TO CALCULATE THE SELLING PRICE:
Use the following formula:
COST PRICE ÷ COST PRICE % X 100
[This mark-up should cover overheads and
salaries and also allow for a profit]
GROSS PROFIT VS NET PROFIT
?????
GROSS PROFIT
This is a false profit...
It is the money in the bank BEOFRE the bills are
paid
i.e.
Total Takings less FOOD COSTS only
NET PROFIT
This is REAL profit
The money in the bank after ALL the expenses
have been paid –
Total income less total expenses