Chapter 3 of HRM13

3. PRE- PURCHASE FUNCTIONS STANDARDIZED RECIPES Standard ingredients, Portion size, quality, consistency, quantity, p urchasing COST CARDS Portion Cards, Yield Factors, Sell Prices SPECIFICATIONS Product Descriptions PAR STOCK Inventory levels, Order Building REQUISITION Order building, Purchasing SHOPPING LISTS Call sheets, Bid sheets, Suppliers, Bidding PURCHASE ORDERS Security, Ship Order, Price Guarantee, Contract BOH FUNCTIONS RECEIVING ACTIVITIES Best practices, invoices, security, sanitation INVOICE MANAGENENT Payment, Price checking, Security STORAGE PRACTICES & INVENTORY MANAGEMENT Best Practices, Sanitation, Security, Inventory methods KITCHEN PRODUCTION Production schedules, Portion Tracking, Recipe Control, Serving Controls, Food Safety PRODUCT ISSUING Requisitions, transferred, daily & monthly costs, food cost percentage FOH FUNCTIONS GUEST Guesting, Seating, sales, serving, busing, payment, Comment Cards GUEST CHECK Sales History, turnover, average check, cash management, revenue forecasting & budgeting, menu item analysis THE MENU

14. SAMPLE COST CARD Recipe Name : Chicken Noodle Soup Type of Recipe : Soup Spice Factor % = Date : 8/2 xxx File Code : Soup – 6 Q Factor = #of servings : 25 Cost per Portion (CCP) : FC % = Portion Size : 10 oz. Recipe Ingredients Invoice Recipe Extension Amount Unit Cost Unit Cost Unit 1 ½ gal. Chicken Stock $ .50 qt. $2.00 gal. 1 ½ lb. Chicken breast fillet 2.25 lb. $2.25 lb. 1 ¼ lb. Egg Noodles, narrow 17.00 Case/ 10 lb. $1.70 lb. ½ lb. Onions 15.00 Bag/ 50 lb. .30per lb. or .01875 per oz. lb. 2 Each Bay leaves SF To Taste Salt SF To Taste Pepper SF 25 Each Oyster crackers, pkg. 10.65 Case/ 200 .05325 each 25 oz. Parsley, chopped, garnish SF Rec. Cost/# of servings CPP CPP + Q CPD X 1.SF% TCPD/FC% = MMP A B C D E F G H I

19. CHICKEN BREAST Anytime the recipe unit and the invoice unit are in harmony as in the case of the chicken, the task is quite simple. The purchasing unit and the recipe unit match. The invoice cost simply transfers to the recipe cost column with no further manipulation or breakdown needed. TO FIND THE COST PER PURCHASING UNIT COST PER EXTENDED PRICE YEILD

20. RECIPE COSTING HOT TIP # 2 When the recipe and the invoice unit match, simply transfer the cost information to the recipe cost column. No further manipulation or break down is needed EGG NOODLES The egg noodles are purchased in a 10 pound case. That is the purchasing unit. The recipe calls for a portion of the case. The task here is to compute a unit cost for the egg noodles that agrees with the recipe units. COST PER EXTENDED PRICE YEILD

21. The extended price is the invoice cost for the full case of egg noodles. Think of the yield as being what is inside the case – in this case, it is 10 pounds of egg noodles. The end of the formula is the left blank because this will change, depending on the product you are working with. For example the outcome is cost per pound. COMPUTATION: COST PER EXTENDED PRICE YEILD $17.00 10 lb. $1.70 per pound $1.70 would be the recipe cost for egg noodles. *The units must be included.

22. ONIONS The process is the same as for the egg noodles, but with a little twist. The onions are purchased in 50- pound bags, so the task is to break the cost down to the cost per pound. COMPUTATION: COST PER EXTENDED PRICE YEILD $15.00 50 lb. $30 per pound Because only .5 pound is needed, you needed you must use the formula one more time, to find the cost per ounce. You must compute again.

23. COMPUTATION: COST PER EXTENDED PRICE YEILD .3 16 (ounces in a pound) .01875 per ounce The next step is to multiply the 8 ounces needed in the recipe by .01875 to get the final cost for 8 ounces. (This is actually the last step in the process and since we are in the process and since we are in the middle of it, it makes good sense to just continue the equation and finish the job.) The cost recorded in the invoice cost column can be recorded in either the cost pound or cost per pound or cost per ounce notation. . 018750 (cost per ounce) x 8 (recipe ounces) = .15 (cost per ½ pound ) There is a quicker way to calculate the cost of the onions. Eight ounces is one half of a pound. Just divide .30in half and get the answer quickly. Be aware that there is no “rule” that recipes have to record ingredients in such convenient units.

24. The procedure for the oyster crackers is exactly the same. OYSTER CRACKERS COST PER EXTENDED PRICE YEILD $ 10.65 200 .05325 Because ultimately, 25 packages are needed – 1 for each serving of soup – the final extension will be: EXTENDED PRICE / YIELD = COST PER PACKAGE OF CRACKERS $ 10.65 / 200 = .05325 COST PER PACKAGE OF CRACKERS X 25 = TOTAL EXTENDED PRICE .05325 X 25 = $ 1.33125 OR $1.34 Rounding should take place at this point rather than rounding at the pre-package cost and then rounding again at the end.

25. RECIPE COSTING HOT TIP # 3 Rounding should take place at the end of the work; do not round at every step of the way. Carry the calculation through on your calculator all the way to the final answer, then round up.

26. PRACTICE CALCULATIONS 8 lb. of carrots 2 pt. of half & half 1 c. of milk 20 lb. of potatoes 4 lb. of butter 2 - #10 can of tomatoes $17.50 / 25 lb. bag of carrots $ 3.69 / ½ gal. of half & half $2.25 / 1 gal. of milk $14.50 / 50 lb. bag of potatoes $81.00 / 36 lb. case of butter $36.50 / 6 - #10 cans of tomatoes Practice breaking down the following examples into recipe cost PRECIPE CALLS FOR INVOICE COST RECIPE COST

27. ANSWERS Carrots Half & Half Milk Potatoes Tomatoes $17.50 = .70 per pound $3.69 / 2 = $ 1.85 per pint or $3.69 / 64 (oz. per ½ gallon) = .0576 .0576 x 32 oz. (oz. per pint) = $ 1.85 $2.25 / 16 (cups per gallon) = .1406 (if sticking to the rule of always rounding costs up, this would be recorded as .15) $14.50/ 50 lb. = 29 per pound $36.50/6cans = $6.0833 per can, or $6.09

28. FINISHING THE COSTING JOB The last step is to compute the extensions, this could be done by multiplying the recipe quantities and the recipe cost together. This is called extending the recipe and the formula is as follows: RECIPE QUANTITY X RECIPE UNIT PRICE = EXTENDED PRICE OR QUANTITY X UNIT PRICE = EXTENDED PRICE

29. COMPUTING FOR THE EXTENTION COLUMN: A X F = H Stock: 1 ½ gals. X $2.00 per gallon = $3.00 Chicken Breast: 1 ½ lb. x $ 2.25 per pound = $3.375 or $3.38 Egg Noodles: 1 ¼ lb. x $ 1.70 per pound = $ 2.125 or $2.13 Onions: ½ lb. x .30 per pound = .15 * When costing, always round up to the next penny. Recipe Name : Chicken Noodle Soup Type of Recipe : Soup Spice Factor % = Date : 8/2 xxx File Code : Soup – 6 Q Factor = #of servings : 25 Cost per Portion (CCP) : FC % = Portion Size : 10 oz. Recipe Ingredients Invoice Recipe Extension Amount Unit Cost Unit Cost Unit 1 ½ gal. Chicken Stock $ .50 qt. $2.00 gal. 1 ½ lb. Chicken breast fillet 2.25 lb. $2.25 lb. 1 ¼ lb. Egg Noodles, narrow 17.00 Case/ 10 lb. $1.70 lb. ½ lb. Onions 15.00 Bag/ 50 lb. .30per lb. or .01875 per oz. lb. 2 Each Bay leaves SF To Taste Salt SF To Taste Pepper SF 25 Each Oyster crackers, pkg. 10.65 Case/ 200 .05325 each 25 oz. Parsley, chopped, garnish SF Rec. Cost/# of servings CPP CPP + Q CPD X 1.SF% TCPD/FC% = MMP A B C D E F G H I

30. TOTAL RECIPE COST AND CALCULATING THE COST PER PORTION To determine the total recipe cost, add all the extension together. The result tells what it costs to produce the full recipe. This is nice to know, but more important, one must now what it costs for just one serving. Just use the following formula: COST PER EXTENDED PRICE YEILD $10.00 25 .40 The total recipe cost for the Chicken Noodle Soup is $10.00. This is the extended price. The recipe’s yield is 25.

31. COMPLETED COST CARD FOR CHICKEN NOODLE SOUP Recipe Name : Chicken Noodle Soup Type of Recipe : Soup Spice Factor % =10% Date : 8/2 xxx File Code : Soup – 6 Q Factor = #of servings : 25 Cost per Portion (CCP) : FC % = Portion Size : 10 oz. Recipe Ingredients Invoice Recipe Extension Amount Unit Cost Unit Cost Unit 1 ½ gal. Chicken Stock $ .50 qt. $2.00 gal. $3.00 1 ½ lb. Chicken breast fillet 2.25 lb. $2.25 lb. $3.38 1 ¼ lb. Egg Noodles, narrow 17.00 Case/ 10 lb. $1.70 lb. $2.13 ½ lb. Onions 15.00 Bag/ 50 lb. .30per lb. or .01875 per oz. lb. .15 2 Each Bay leaves SF SF To Taste Salt SF SF To Taste Pepper SF SF 25 Each Oyster crackers, pkg. 10.65 Case/ 200 .05325 each $1.34 25 oz. Parsley, chopped, garnish SF SF Rec. Cost/# of servings .40 CPP CPP + Q CPD X 1.SF% TCPD/FC% = MMP A B C D E F G H I

34. EXAMPLE OF A COST CARD WITH YIELD PERCENTAGE COLUMN Notice that in order to end up with 8 ounces of onions EP, the cooks need to start with 9.19 ounces. In this example, the cost difference is minimal because the recipe calls for only 8 ounces of onions. Chicken Noodle Soup Recipe Ingredients Amount Unit Yield% New amount 1 ½ gal. Chicken Stock 1 ½ lb. Chicken Breast meat 1 ¼ lb. Egg noodles, narrow ½ lb. 87% 9.19 oz. Onions 2 each Bay leaves To taste Salt To Taste Pepper 25 each Oyster crackers, pkg. ½ oz. Parsley, chopped, garnish

36. NAME: Chili Dog YIELD: 1 serving DATE: 8/2XXX Hot sand: #5 Spice Factor:: 1 serving Food Cost %: 8/2XXX Cost Per Production: 71 True Cost per Dish: Minimum Menu Price: All beef hot dog (8/lb) Rolls, hot dog Chili Sauce (#10 can) Pickle chips (gal.) French Fries 1 each 1 each 2 oz. 6 each chips 6 oz. $1.92/ lb. (8/lb) $1.25 / pkg. (8/pkg.) $20.22/ 6 # 10 cans SF $12.50/20 lb. case TOTAL .24 .16 .07 SF .24 .71 Quantity Ingredients Unit Price Extension Recipe costing for plate cards is quite simple. Some formats include the costing directly on the card itself. EXAMPLE *SF – Spice Factor

41. THE SPICE FACTOR

44. USING THE SPICE FACTOR Using the Spice Factor is quite simple. Each item’s cost per portion is increased by this percentage. To demonstrate the concept, look at the chart below . It was determined that the soup cost .40 to produce. Since the soup is not an entrée, the next in line is the (Q factor) is skipped Assume the spice factor for this operation is 10% Simply multiply the cost per portion by 1.10 (110%) to get new cost per portion Recipe Cost / # of serving $ 10.00 / 25 Cost per Portion (CPP) .40 CPP+ Q = CPD CPD x 1.SF% = TDPD .44 .40 X 1.10 = .44 TCPD/ FC% = MMP

46. RECIPE COSTING HOT TIP # 4 Be sure to write the spice factor line like this: COST PER PORTION X 1.SF% = TRUE COST PER DISH

47. RECIPE COSTING HOT TIP # 5 Rename the Q factor the Smashed potato Factor to remember to only add the Q Factor to entrée items offered with the semi -a -la -carte pricing structure

52. RECIPE COSTING HOT TIP# 6 - 10 6. Cost is always going up. If at anytime you are using this formula and your new answer is less than the previous line – STOP. This is impossible. If we keep on adding on factors to increase the cost, then the answers should demonstrate that fact. Recheck your work. 7. The Q factor has to be added on before the spice factor. Those recipes use seasonings, herbs and so on. 8. Always write out the formula line – by – line, as demonstrated. You don’t need to write out all the letters, just the math work. Doing so means you can easily check your work and you can spot errors quickly. Resist the temptation to write the computation in one string. When you do so, you cannot check your work or spot errors. Only use shortcuts after you have completely mastered the formula and its elements. 9. The beauty of the formula is that one line takes you right to the next one. There is no need to clear numbers out of calculators after each calculation. 10. For the most accurate results, run the figures through the calculator without rounding each line. The final answer is the place to round.