# Cost Control Techniques

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Controlling costs will help ensure a successful business operation. What would happen if a business did not control its costs?

Controlling costs will help ensure a successful business operation. What would happen if a business did not control its costs?

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SECTION 14.1

Calculate Food Costs

### Reading Guide

Pace Yourself Short blocks of concentrated reading repeated frequently are more effective than one long session. Focus on reading for 10 minutes. Take a short break. Then, read for another 10 minutes.

Read to Learn

Key Concepts

• Explain how foodservice establishments manage portion control.

• Describe how to calculate unit cost.

• Examine the factors that affect yield percentages.

• Summarize how to cost a recipe.

### Main Idea

It is important to calculate and control food costs to keep a business running smoothly. Several factors can influence the cost to prepare menu items.

Content Vocabulary

• specification • yield test

• product yield

• yield percentage

• by-products

• AP weight j trim loss

• yield weight

• total weight as served

j as-served (AS) • cost per portion portion

Academic Vocabulary

Graphic Organizer

As you read, use a sequence chart like this one to list the four steps of the raw yield test. Write one step in each box.

Steps in a Raw Yield Test tJ Mathematics

NCTM Number and Operations Compute fluently and make reasonable estimates.

NCTM Number and Operations Understand numbers, ways of representing numbers, relationships among numbers, and number systems.

NCTE National Council of Teachers of English NCTM National Council of Teachers of Mathematics

NSES National Science Education

Standards NCSS National Council for the Social Studies

Graphic Organizer Go to this book's Online Learning Center at glencoe.com for a printable graphic organizer.

A foodservice facility is more likely to cover its operating expenses if it monitors food costs. In this section, you will learn about factors that influence the cost of preparing menu items, such as portion size. You will also learn how to calculate and control food costs.

Customers expect their food to be uniform in size and quality. They are concerned not only with how the food looks and tastes, but also the value they receive at their meal for their food dollars.

You must serve consistent portions to have a successful foodservice operation. These guidelines can help you control portions:

• Purchase items according to standard specifications.

• Follow standardized recipes.

• Use standardized portioning tools and equipment.

### Purchase by Specifications

A foodservice operation must develop and implement, or put into practice, standards to control food costs. These standards must be followed to be consistent in daily operations.

One way to maintain those standards is to purchase food according to specifications. A specification, or spec, is a written description of the products a foodservice operation needs to purchase.

One way to purchase by spec is to purchase products by count or number. The kitchen can then expect to create a definite number of food items from that amount. For example, whole cheesecakes can be purchased and then cut into a set number of individual servings.

A second way to purchase by spec is to order products already divided into individual servings. For example, most facilities purchase single-serving pats of butter or packets of sugar or ketchup.

### Follow Standardized Recipes

Standardized recipes also help maintain fixed portions. A standardized recipe includes the portion size and the total number of portions you will make when you prepare a recipe.

The Right Amount This cheesecake was ordered so that an exact number of portions could be created. Why is portion control so important to a foodservice operation?

For example, if you prepare sauerkraut based on your facility's standardized recipe, you will end up with a specific number of servings. If you cook Polish sausage for too long or at too high of a temperature, the meat could shrink. This would create smaller portions. It is important to use the cooking time and temperature that is specified in the standardized recipe.

### Portioning Tools and Equipment

If you use different-size ladles to fill soup bowls, you will serve different amounts of soup. You must use the same-size ladle each time you serve to ensure that portions are consistent. Selecting the correct tools and equipment for each dish your facility prepares is an important aspect, or part of a problem or challenge, of portion size control.

A scoop, or a disher, is a commonly used tool to control portions during food preparation and serving. Use scoops to measure quantities of food such as cookie dough, mashed potatoes, or corn bread stuffing.

Scoops are available in a variety of sizes with color-coded handles. This helps foodservice employees match the appropriate scoop with a particular portion size. For example, for a recipe for boneless stuffed chicken breasts, you may need one No. 12 scoop of stuffing for each breast. However, this may apply only to your particular foodservice operation. Another operation's version of this recipe may use one No. 8 scoop of stuffing for each chicken breast.

Other portion control tools and equipment include ladles, spoons, balance and portion scales, slicers, and volume measures. Using these tools and equipment helps you more accurately control cost per portion. It also allows customers to know what size portion they can expect.

foodservice operation control portion sizes?

Most foodservice facilities purchase food in bulk, or in large quantities of a single food product. Buying in bulk is effective if storage space is available and no food is wasted. Examples of bulk packages include a case of canned tomatoes, a flat of strawberries, or a 50-pound bag of flour. A flat is a shallow box or container used to hold foods. Bulk items are divided into smaller quantities to use in individual recipes.

To find how much it costs to make one recipe, you must first find out how much the ingredients cost. To do this, convert the bulk price, called the as-purchased (AP) price, to the unit cost. The unit cost is the cost of each individual item.

For example, suppose a 50-pound bag of granulated sugar costs \$22. A marinated mushroom salad recipe calls for 3 ounces of sugar. The unit for the sugar is ounces. To find the unit cost of each ounce of sugar, first convert pounds to ounces by multiplying 50 by 16. (There are 16 ounces in 1 pound.) To find how much each ounce costs, divide the total cost by the total number of units (in this case, ounces).

(units) 800.00. )22.00. (AP price) ° 1600* 6000 5600 4000 4000 0

The unit cost is \$0.03 per ounce of sugar.

The AP price is the cost of a food product when it is first purchased, usually in a large quantity. Some foods, such as deli meats, are used completely after they are purchased. There is no food waste. Other foods need

some type of preparation, such as trimming or deboning, which results in waste. To trim food means to cut off excess fat or to cut food to a desired shape or size. To debone means to remove bones from meat, poultry, or fish.

Product Yields

Product yield is the amount of food product left after preparation. Many times, foods lose volume or weight as they are prepared.

A lot can happen to food to make the portion served to a customer smaller than the original product. For example, a roast can shrink up to one-third of its original size when it is cooked. The as-served (AS) portion is the actual weight of the food product that is served to customers.

### Edible Portion

Many foods are reduced in size and weight during preparation and cooking. For example, carrots must be prepared before cooking by being peeled. After preparation, the consumable food product that remains is called the edible portion (EP).

^J The Right Weight The difference between AP and EP weight can be significant. What are the consequences of underestimating a food's EP weight?

You can see that what you buy is not always what you serve. Foodservice buyers must consider the AP cost, EP cost, and AS portion when they decide how much of a food product to purchase.

must foodservice buyers consider when they determine how much of a product to purchase?

### Yield Percentages

Product yield is the usable portion of a food product. A yield test is a process by which AP food is broken down into EP and waste. The yield percentage is the ratio of the edible portion of food to the amount of food purchased.

Yields for various foods vary depending on many factors. For example, how much a foodservice operation typically trims its meat products and whether or not these trimmings are used in other recipes will affect the yield.

Gourmet Math r

### Calculate Inventory Value

Every foodservice establishment keeps food products and ingredients that will eventually be sold to customers, called inventory. Calculating inventory value can be as simple as counting the quantity of each item, and multiplying that quantity by the item's unit cost. More complicated situations arise when an item is purchased at different times at different costs. For this, an accounting method such as first in, first out (FIFO) can be used.

On Monday, 100 grapefruit were purchased for \$250. On Wednesday, 50 grapefruit were purchased for \$150. On Friday, 50 grapefruit were purchased for \$115. What is the value of your closing grapefruit inventory (using FIFO) if you started the week with no grapefruit and ended with 64 grapefruit?

¿EH^ffltt FIFO Calculations To calculate inventory value using FIFO, assume that the items remaining in inventory were purchased last. Use the unit cost of the newest batch. If there are more items on hand than were in the newest batch, continue to the next-newest batch, and so on.

Starting Hint Assume the 64 remaining grapefruit come from the most recently purchased batches. There are only 50 items in the newest (Friday) batch, so the remaining 14 items should come from the Wednesday batch. Calculate the unit cost of each batch (cost ^ quantity), and multiply by the quantity coming from that batch.

NCTM Number and Operations Compute fluently and make reasonable estimates.

To conduct a raw yield test for products without by-products, follow these steps:

1. Weigh the product before trimming. This number is called the AP weight.

2. Weigh the waste material that was trimmed from the purchased product. This number is called the trim loss.

3. Subtract the trim loss from the AP weight. This number is the yield weight.

4. Divide the yield weight by the AP weight. This results in the yield percentage.

For example, say you take two whole red bell peppers from the refrigerator to prepare marinated mushroom salad. The two peppers weigh a total of 11 ounces. After trimming the peppers, you have 3 ounces of trim loss, or unusable waste. To find the yield percentage, subtract the trim loss (3 ounces) from the AP weight (11 ounces). Then, divide the yield weight by the AP weight.

.727 rounded up =.73 or 73% (yield percentage)

### Raw Yield Tests

Raw yield tests are used on food products that do not have any usable leftover parts, or by-products. For example, the outermost leaves of a head of lettuce are trimmed and discarded when the lettuce is cleaned. The trimmings are never used for other dishes. For foods like this that have no by-products, you must keep this loss in mind when you determine the yield.

The yield percentage of 11 ounces of fresh red bell peppers is 73%.

Each foodservice operation has its own standards for how workers should trim products. This means that yield percentages will differ in different foodservice operations.

Cooking Loss Test

To determine how cooking affects yield percentage, follow the steps on the next page.

1. Identify the net cost and yield weight of the raw food product.

2. Count how many portions are produced from the product after cooking.

3. Multiply the number of portions by the portion weight when the food is served. This gives you the total weight as served. For example, the net cost of 20 pounds of boneless turkey breast is \$62. When cooked, the turkey breast results in 46 portions, each weighing 6 ounces. To determine the total weight as served, multiply the number of portions (46) by the portion weight when served (6 ounces).

46 (number of portions) X 6 (portion weight) 276 oz.

17.25 16 (oz.) ) 276 ' (oz.) 16 116 112 40 32 80 80 0

17.25 lbs. = total weight as served

The total weight of 20 pounds of boneless turkey breast when served is 17.25 pounds.

Shrinkage

Shrinkage may account for the weight loss that happens when food is cooked. Shrinkage is the difference between the AP weight and the AS weight.

By finding the percent of shrinkage, you will know how much shrinkage affects the cost per pound of a food product. To calculate this percentage, divide the shrinkage by the AP weight.

percentof shrinkage AP weight ) shrinkage

For example, you may want to determine the shrinkage percent of a hamburger patty. The AP weight of a hamburger patty is 4 ounces, while the AS weight of a cooked hamburger patty is 3.5 ounces. The difference of 0.5 ounces is the shrinkage. Divide the shrinkage (0.5 ounces) by the AP weight (4 ounces).

.125

The percent of shrinkage is 12.5%.

shrinkage involved in food cost calculations?

### Costing Recipes

Once you have calculated the total recipe cost, you can figure out how much each portion costs. Chefs determine the selling price of one portion based upon the cost of that portion. You can also adjust a selling price based on what your competition charges or what you think customers will pay. Once you know portion cost and decide on a selling price, you can determine an ideal food cost based on how many items you sell.

### Recipe Costing Forms

A recipe costing form helps manage food purchasing and preparation. (See Figures 14.1 and 14.2 on pages 354 and 355.) There are several parts of a recipe costing form:

Recipe Name The recipe name should be the same as the one listed on the menu.

Portion Size The standard amount of the food item that is served to each customer.

Use The Q Factor? There are many items that the Q factor measures:

j Small amounts of ingredients, such as pepper. j Measurements of ingredients listed as "to taste." j Seasonal changes in food prices. j Condiments, such as ketchup and mustard. j The cost of incorrectly measuring ingredients.

Yield The number of servings that one preparation of the recipe yields.

Menu Category The menu category in which the food appears. See Chapter 12 for traditional menu categories.

Ingredients The list of each ingredient used in the recipe.

Edible Portion (EP) The amount of an ingredient left after by-products or waste products have been removed from the as-purchased amount.

As-Purchased (AP) Amount The amount of the product that is purchased.

Unit Purchase Price The price paid for each individual item in a bulk purchase. An item is measured in units such as pounds, gallons, or cans.

Cost per Unit To determine the cost per unit, divide the unit purchase cost by the number of purchase units, or quantity. For example, the mushrooms in the form on page 354 cost \$12.20 for 10 pounds. Therefore, \$12.20 -h-10 pounds = \$1.22.

For some ingredients, you may need to convert the purchase unit to the type of unit used in the recipe. For example, although sugar is purchased in 50-pound bags, the recipe amount is in ounces. To determine the cost of each ounce, first convert pounds to ounces as follows: 50 pounds X 16 ounces = 800 ounces. Then, you can determine the cost per unit.

Ingredient Cost To determine the cost for each ingredient used in the recipe, multiply the cost per unit by the AP amount. For example, the mushroom cost per unit is \$1.22. Therefore, \$1.22 X 2 pounds = \$2.44, or the ingredient cost for the mushrooms.

Ingredient Total Cost Add together the cost of each ingredient to get the ingredient cost total. For the marinated mushroom salad, the ingredient total cost is \$6.86.

Q Factor (1%-5%) The Q factor, or the questionable ingredient factor, is the cost of an ingredient that is difficult to measure. Most foodservice operations have a preset Q factor percentage, such as 5%. That percentage is multiplied by the total cost of ingredients to find the Q factor dollar amount.

Total Recipe Cost To calculate this cost, add the ingredient total cost and the Q factor.

Portion Cost To calculate the portion cost, divide the total recipe cost by the total number of portions that the recipe yields.

### Cost per Portion

Once you have completed a recipe costing form, you will want to find the cost of individual portions of that recipe. The cost per portion represents the amount you would serve to an individual customer. To find this cost, divide the recipe cost by the number of portions or servings.

The standardized recipe for marinated mushroom salad makes 10 portions. You have added up the ingredient costs and found that the recipe cost is \$7.20. To find the cost per portion, divide \$7.20 by 10.

The cost per portion is \$0.72.

situations would require you to use the Q factor?

y FIGURE 14.1 Recipe Costing Form

Cost Estimates A recipe costing form can help restaurants determine the individual price of each portion. Why is this important?

Recipe Name: Marinated Mushroom Salad Portion Size: 5 oz. Yield: 10 servings Menu Category: Salad

 Ingredients EP% AP Amount Unit Purchase Price Cost Per Unit Ingredient Cost Quantity Item Quantity Cost Unit 2 lb. Button mushrooms, whole 100% 2.00 lb. \$12.20 10 lbs. \$1.22 \$2.44 8 oz. Diced red bell pepper 73% 10.96 oz. \$25.85 22 lbs. \$0.07 \$0.77 1 oz. Lemon juice 100% 1.00 oz. \$13.32 12 qt. \$0.03 \$0.03 8 oz. Olive oil 100% 8.00 oz. \$14.95 1 gal. \$0.12 \$0.96 2 oz. Granulated sugar 100% 2.00 oz. \$20.50 50 lbs. \$0.03 \$0.06 1.5 oz. Fresh basil, chopped 100% 1.50 oz. \$18.75 2.25 lbs. \$0.52 \$0.78 1.5 oz. Fresh oregano, chopped 100% 1.50 oz. \$4.70 12-oz. bag \$0.39 \$0.59 1 head Romaine lettuce, shredded 100% 1.00 head \$17.95 24 heads \$0.75 \$0.75 8 oz. Green peas 100% 8.00 oz. \$0.89 1 lb. \$0.06 \$0.48 Salt & pepper to taste Ingredient Cost Total \$6.86 Q Factor (5%) \$0.34 Total Recipe Cost \$7.20 Portion Cost \$0.72

: Y FIGURE 14.2 Recipe Costing Form

Do the Math With the right information, you can determine the cost per serving of any recipe. Can you determine the cost per unit and individual ingredient costs for this form?

Recipe Name: Grilled Chicken Sandwich Portion Size: 5 oz. Yield: 4 Sandwiches

 Ingredients AP Amount Unit Purchase Price Cost Per Unit Ingredient Cost 4 oz. Boneless, skinless chicken breast 1 lb. \$2.67 6 oz. Provolone cheese 1 lb. \$2.39 3 oz. Mushrooms, sliced 1 lb. \$2.25 (each tomato = 8 slices) 2 tomatoes = 1 lb. \$0.53 4 leaves Lettuce 1 head = 16 leaves \$0.77 4 oz. Low-fat avocado dressing 1 gal. \$7.85 8 slices Bread, 7-grain 1 loaf = 24 oz./2 slices \$1.54 4 oz. Pickles, sliced, drained 6 oz. \$0.25

Review Key Concepts

1. Explain how standardized recipes can help foodservice establishments manage portion control.

2. Describe how product yield affects unit cost.

3. Summarize how the cooking loss test is performed.

4. Explain how to find the cost per portion of a recipe.

### Practice Culinary Academics Mathematics

5. If 12 ounces of raw bacon weighs just 4.5 ounces after cooking, what is the shrinkage percentage? If the bacon cost \$3.95 last week but costs \$3.50 this week, what is the percent of decrease in price?

^^^^^^^ Percent of Decrease Calculate the amount of decrease by subtracting the new number from the original number. Divide this amount by the original number to find the percent of decrease.

Starting Hint Shrinkage is really another name for a percent of decrease problem. Shrinkage deals with food weights. Calculate both problems the same way, using this formula: (original number - new number) ^ original number.

NCTM Number and Operations Understand numbers, ways of representing numbers, relationships among numbers, and number systems.

fijà Checkyour answers at this book's Online Learning Center at glencoe.com.

SECTION 14.2

Manage expenses to make your re&aurant successful.

Continue reading here: Manage Food Cost Factors

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