 # Basic Food Costing Calculations and Other Costings Used in Hotels and Restaurants

## Problem 1

A Chicken dinner consisting of chicken, a vegetable, two rolls, mashed potato & a beverage costs Rs 145 to produce. If a food cost percentage of 40% is maintained, what will be the selling price of this dinner?

### Solution-

• Food cost percentage is 40%

• The Cost to produce the dinner is Rs 145/-

• So the selling price should be 145/40*100 = Rs 362.5 or Rs 363.00

## Problem 2

A food department incurred the following costs during a month-

Manager Salary-25000/-

Utility expenses-18000/-

Supervisor salary-15000/-

Equipment costs-5000/-

Waiting staff wages - 20000/-

The revenue for the month was 240000/-

Calculate the labor cost percentage.

### Solution

Total cost towards Salary is Rs 25000+15000+20000 = 60000/-

Utility & equipment expenses should not be included in the labor cost.

Thus the labour cost % will be - 60000/240000*100 = 25%

## Problem 3

A property had food sales of 100,000/-for the month. Its food inventory, purchases, etc. for the month are as follows-

Opening inventory- Rs 5000/-Purchases- 30000/-, Closing Inventory-6000/- Food for employee needs- 1000/-

• Find the property’s food cost % for the month.

### Solution

• Total Sales 100000/-

• Total food consumed-5000+30000-6000 = 29000/-

Cost towards Employee Food 1000/-So, the net cost of food sold- Rs 29000-1000=28000/-

FCP = 28000/100000*1 00 = 28%

## Problem 4

Calculate the cost of per servable kilo of one of your operation’s entrée dishes from the information provided below-

Purchase (original) weight- 12.8 kg

Servable weight- 7.6 kg

As purchased price- Rs 85 per kilo

### Solution

•Yield is equal to 7.6 kilos (Edible portion-EP)

•Total cost as purchased (AP)-12.8 kg*85/- = 1088/-So cost per servable kilo will be Rs 1088/ 7.6 = 143.15 or Rs 143.00

## Problem 5

Determine the portion cost of the menu item given the following data-

Cost of main ingredients- 450/-

Production loss- 10%

Seasoning & spices cost percentage is 8%

Portion yield -18

### Solution

Yield is 90%. But when calculating Portion cost, have to take AP to cost i.e 450/-

Seasoning/Spice cost is 8% of Rs 450/- i.e Rs 36/-

So the total cost of production is 486/-

No. of portions — 18

So per portion cost is 486/18 = 27.00/-

## Problem 6

The forecasted yearly sales of Sam’s steakhouse is Rs 800000/- Profit requirements for the year Rs 120000/- & non-food expenses (incl Labour) have been estimated at Rs 380000/-.

Assuming the forecasts to be accurate, what would the budgeted food cost percentage have to be, in order to ensure that the profit requirements are minimally met?

### Solution

Revenue from sales after other costs is equal to Rs 800000- Rs 380000 or Rs 420000/- Of this Rs 120000/- is the targeted profit.

The Cost that can be incurred directly towards food is Rs 420000 - Rs 120000 = Rs 300000/-

So the targeted food cost % will be 300000/800000*100 or 37.5%

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