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Food Cost

post #1 of 10
Thread Starter 

Hi, I'm hoping to land a corporate chef position with a rest. group.  i need to brush up on the business end.  any online crash courses available?  V

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post #2 of 10

Forgive the shortness of this reply, as it is targetted not only at you, but at every other person that posts this question in this forum... if you're here to ask for pointers on how to properly manage a kitchen, so you can apply for the "Chef/ manager/ Exec. Chef/ F&B Director/ Head honcho"...

 

YOU ARE NOT READY FOR THE POSITION.

Period.

 

Want pointers? Work you way up to Sous/Exec Sous. Watch, learn, get taught as you do it. Go to school. Go back to all the chefs that taught you as an apprentice and kick their sorry butts for not teaching it to you, like they were supposed to as part of their chef/apprentice duties.

 

Want a crash course in food cost? Sure. here it is

 

Sale Price = (Cost of goods sold X target food cost percentage) / 100.

 

have fun.

post #3 of 10

Don't forget about trim, shrinkage & yield tests.

post #4 of 10

I agree with Prarie Chef. There is no crash course so to speak. You have never been in a situation where you had to do this. Therefore you do not know it. All I can tell you is to find true cost since everything you sell is measured by the portion in pounds and ounces. Break all your cost of item down to ounces. In other words a Pound (16 oz) cost $1.60 or 10 cents per ounce. Weigh the trim and waste (2 ounces) now you have a net weight of 14 ounces. !.60 divided by 14= 11.43 per ounce so a 5 ounce portion cost you 5 X 11.43 or 57.15 per portion. Times this by the % you want to work on. I suggest a light accounting class at night for you.

Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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post #5 of 10

WOW. We've got a testy crowd in the house today. 

"And those who were seen dancing were thought to be insane by those who could not hear the music."

I'm not sayin', I'm just sayin'.

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"And those who were seen dancing were thought to be insane by those who could not hear the music."

I'm not sayin', I'm just sayin'.

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post #6 of 10

Not testy, but once you learn how to use a knife, you don't forget . Same thing with figuring % and food cost %, you do not forget the basics.

Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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post #7 of 10

That's not true.  I've herd of two different ways to do it aside from mine. Pete has a way and I can't remember the other.

There's no crash course because there are a couple of ways. Heck Chefedb has a formula just to figure out how long he's been working in the industry.lol.gif

The crabby guys should get together with Nicko and try to make a bio required for all professional applications. yea!

FOR YEARS I LIVED TO WORK! NOW I WORK TO LIVE!
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FOR YEARS I LIVED TO WORK! NOW I WORK TO LIVE!
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post #8 of 10

Yeah, some harsh responses in here. Aren't we here to provide help and support for other chefs? 

 

To be fair, the OP never said he had no idea how to do food cost and such. He was simply looking for a resource to help him brush up on it. There is a huge difference. 

 

I can't be of much help in that department, but your best bet might be to look on Amazon or your local book store for a book about business aspects in the restaurant industry. I would just type in "food cost" at amazon and see what pops up. 

 

Good luck on your job hunt.

 

[quote]a Pound (16 oz) cost $1.60 or 10 cents per ounce. Weigh the trim and waste (2 ounces) now you have a net weight of 14 ounces. !.60 divided by 14= 11.43 per ounce so a 5 ounce portion cost you 5 X 11.43 or 57.15 per portion. Times this by the % you want to work on. I suggest a light accounting class at night for you.[/quote]

 

I think your math might be wrong, chefedb. Did you mean to say that a portion costs $0.11 per ounce? Looks like you just put the period in the wrong place. But you can't have something that started at $1.60 per pound inflate to over $180 a pound at the end. If you are indeed trying to help the OP you might make it more clear. 

 

The important lesson to take away from what chefedb says is that when calculating food cost you have to account for the full cost of the food. If I bought a whole beef tenderloin PSMO at, say, 100 dollars, then my final number of portions have to account for the total $100. 

 

For example,

 

Lets say that the PSMO weighs 10 lbs, and we spent 100 dollars on it. So it cost us $10 per pound, or just under $0.63 cents an ounce. Now, before we sell the beef, we have to trim it, seperate the usable trim from the waste, and portion it. So lets say we get 13 8oz portions of filet we can sell. Now, at our original price of $0.63 cents an ounce, we would cost the filet at just over $5. BUT, if we multiply the number of portions by the portion price, we come up with $65. Which is well below the original $100 purchase price. So we basically have to account for all the trim and waste of the filet. There are a couple of different ways to do this, but for instance, you can have the filet portions absorb the FULL price of the original PSMO. So, if we get 13 portions out of our PSMO, each portion cost us ($100/13=) $7.69. So that is our "real" price we paid for each filet that goes on our menu. 

 

Now, using the price, we can calculate our food cost. If we desire a 33% food cost, we take the portion price and divide it by our desired percent. So, 7.69/.33=23.30 menu price. This does not include things like vegetables, starches, sauces, etc, this is simply for the protein. But the same formula and idea can be expanded into any type of food. Also, since the full price of the PSMO was absorbed into our filet portions, if we can find a way to utilize the edible trim of the tenderloin (say, soup or stew, meat balls, sandwich, steak and eggs, whatever) then the meat we are suing, as long as it is from the PSMO but not filet portions, is essentially "free," since the cost is passed onto the customer. Some systems assign prices to the trim as well, and use that, some places don't. 

 

Now, this is different than the inventory, weekly/monthly food cost most restaurants will require as well. The above is how to properly calculate menu prices and account for waste of product. I won't go into great detail here, since it is a bit more complicated, but the basic formula is this:

 

FC%= (Begining Inventory + Purchases - End Inventory) / Sales

 

So, our actual food cost, based on what we used and bought and sold, is this number. So you take the inventory at the end of every month, the beginning inventory is what you began the month with (usually the ending inventory from the previous month) and you add all the FOOD purchases you made for that month, and subtract the value of the inventory you just counted (or "current" inventory) and divide by the total food sales for the month. 

 

So you can use these two formulas to calculate goals and forecast, and if you fail to meet them. Say you set every recipe and item of food at a straight 33% food cost and price your menu accordingly (which would never happen, but for illustration purposes we can pretend) but your actual calculated food cost was 40%. You would know something is wrong...maybe your grill guy overcooks too many steaks, maybe someone is stealing from your refrigerator, you have a slow month so you throw a lot of food away, etc. 

 

Hope this helps...this is a very cursory overview of it but it might jog your memory a bit. 


Edited by Someday - 6/3/11 at 3:35pm
post #9 of 10

11.43 Cents per ounce is correct  X # of served ounces . Which in food cost means 11cents per ounce and 43/100 parts of next cent .  It is far easier to butcher the cut of meat first, and then figure the net weight. This is costing and sales per item or ounce. The trim if made into something else(chopped beef, strogonoff etc) requires it's own food cost % . Also when doing monthly include food to bar cherries, fruit , snax etc  and bar to foof cooking wines etc.  Standard accounting and restaurant accounting practices are not quite the same.

Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

Reply
post #10 of 10

Here is a book for culinary math... I think this might be what you're looking for. With it you can make your own Excel spread sheet that will help you along the way.

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