| Food Cost | ||||||||||||||||||||||||||||||||||||
| Know the difference between Gross Food Cost and Net Food Cost. | ||||||||||||||||||||||||||||||||||||
| Gross Food Cost, Gross Food Product Cost is the amount that is spent on Food Products after the invoice has been paid. | ||||||||||||||||||||||||||||||||||||
| Food Waste Cost, Food Product Waste Cost is the cost amount of Food Products that were not sold, cannot be sold, and/or cannot be used in Food Production wasted (discarded). | ||||||||||||||||||||||||||||||||||||
| Example 1: Lettuce cut up or torn for salads, portions of the lettuce head are removed wilted leaves, the stem core, discolored leaves and discarded reducing the weight of the lettuce increasing the Food Cost. | ||||||||||||||||||||||||||||||||||||
| Example 2: Food Product setting in a steam table too long and is no longer servable and must be discarded increase the Net Food Product Cost of that Food Product. | ||||||||||||||||||||||||||||||||||||
| Net Food Cost, Net Food Product Cost is the amount that differs from Food Products purchased minus Food Products Waste Cost. | ||||||||||||||||||||||||||||||||||||
| Net Food Product Cost = Food Product Gross Cost - Food Product Waste Cost | ||||||||||||||||||||||||||||||||||||
| Food Cost Margin, Food Product Cost Margin aka Food Cost Percentage | ||||||||||||||||||||||||||||||||||||
| Food Product Cost Margin is the percentage of Food Product Net Cost divided by the Retail Menu Price of the menu item. | ||||||||||||||||||||||||||||||||||||
| Example 1: Cheeseburger Deluxe with lettuce, tomato, onion, pickle, ketchup, mayonnaise is priced at $8.59. Before lettuce, you cleaned it, processing weighs 12 ounces. After processing weighs 9 ounces. Gross Food Product Cost $1.23, $0.01025 per ounce. After processing the Food Product Waste is 3 ounces. Food Product Waste Cost $ 0.03075. Net Food Product Cost is $0.1366 per ounce. | ||||||||||||||||||||||||||||||||||||
| Food Product Cost Margin = Net Food Product Cost / Retail Menu Price | ||||||||||||||||||||||||||||||||||||
| 0.16% Food Product Margin = $0.1366 per ounce / $8.59 Cheeseburger Price | ||||||||||||||||||||||||||||||||||||
| FOOD PRODUCT | WEIGHT | UNIT | NFPC | |||||||||||||||||||||||||||||||||
| Hamburger Patty | 4 | oz | $ 1.25 | |||||||||||||||||||||||||||||||||
| Hamburger Bunn | $ 0.38 | |||||||||||||||||||||||||||||||||||
| Lettuce | $ 0.014 | |||||||||||||||||||||||||||||||||||
| Tomato | $ 0.03 | |||||||||||||||||||||||||||||||||||
| Onion | $ 0.12 | |||||||||||||||||||||||||||||||||||
| Pickles | $ 0.01 | |||||||||||||||||||||||||||||||||||
| Ketchup | $ 0.02 | |||||||||||||||||||||||||||||||||||
| Mayonnaise | $ 0.33 | |||||||||||||||||||||||||||||||||||
| TOTAL NET FOOD PRODUCT COST: | $ 2.15 | |||||||||||||||||||||||||||||||||||
| MENU ITEM PRICE | MENU PRICE | TOTAL NET FOOD PRODUCT COST |
NET FOOD PRODUCT MARGIN |
NET FOOD PRODUCT PROFIT |
||||||||||||||||||||||||||||||||
| Cheesburger Deluxe | $ 8.59 | $ 2.15 | 25% | $ 6.44 | ||||||||||||||||||||||||||||||||