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LLL - Concepts of Recipe Costing, Selling, Price and Portion Control

The document discusses recipe costing, which is determining the cost of ingredients to produce a recipe or serving portion. Recipe costing is important for budgeting, controlling costs, and setting prices. It involves standardizing recipes, maintaining accurate price lists, and using a recipe cost worksheet to calculate total recipe costs and cost per portion.

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378 views9 pages

LLL - Concepts of Recipe Costing, Selling, Price and Portion Control

The document discusses recipe costing, which is determining the cost of ingredients to produce a recipe or serving portion. Recipe costing is important for budgeting, controlling costs, and setting prices. It involves standardizing recipes, maintaining accurate price lists, and using a recipe cost worksheet to calculate total recipe costs and cost per portion.

Uploaded by

Ma.Lourdes Corpuz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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lll.

Concepts of Recipe
Costing,Selling,Price and Portion
Control
Lesson 1.Recipe Costing in Quantity Food
Production
 In any food establishment,whether it will be a quantity food
production kitchen or a smaller restaurant ,two kinds of cost share
the bulk of the operating expenditures,labor cost and food cost.This
two together account for over 50% of the total cost incurred by
operations.Thus,it is important for a kitchen to find means of
determining,monitoring,and controllingits cost.This is specially true
since these are expenditures that are constantly
increasing.Therefore,any tool that would be invaluable .One such
good starting point is recipe costing.
 What is Recipe Costing?
-Recipe Costing is a process or activity of determining the amount of
resources, in the form of money,needed to produce a specific amount
of product(yield)or a specific amount of serving portions.The recipe
cost represents the amount of money spend on ingredients to produce
the product using a set standard.
Three Related Cost

1.Total Recipe Cost


-this represents the total cost of all ingredients needed in producing the
recipe yield.
2.Extension Cost
-this is total cost of individual ingredient of the recipe based on
prevailing market prices and supplier quotations.
3.Unit Cost or Cost Per Portion
-this represents the cost of one serving portion of a particular item to
prepare
 Why do we need to cost recipes?
-Recipe Costing is a powerful planning and controlling tool in quantity
and institutional food production.It facilitates the different activities
explained below.
1.Budgetting.By knowing the amount of money required to prepare a
dish,operations can determine in advance its needed fund and plan for
them.Recipe costing provides the basis for the determination of potential
food cost,a necessary element in determining eventually the potential profit
of operations.
2.Control.the cost obtained using recipe costing represents potential cost
that would be incurred if production follows set standards.A big difference
between the cost as determined by recipe costing and the actual cost
incurred can be a sign that production may not be following established
standard operating procedures.Thus,recipe costing provide a means of
comparing actual cost and ideal or expected cost.
3.Determination of Selling Price.Although there are many ways of
determining selling price,cost is still one of the primary basis for
pricing.It is important to determine the unit cost or cost per portion in
order to set the price or a serving portion.
4.Maintaining Profitability.Because cost are deductions from revenue
and therefore decreases profit levels,it is essential to watch them
closely.The higher the food cost ,the lower the ability to produce
profit.The goal of production would be to try to minimize expenses in
order to maximize profit.This can be done by ensuring that the actual
cost of producing a recipe costing.
What are the Requisites to Recipe Costing?
 These are several things needed before costing can be done .These
requisites are essential to be sure that the recipe is accurately cost:

Only a recipe that has been tried and tested can be cost.Costing a recipe
Standard that has not been standardized is a waste if resources because the cost
Recipe determined through recipe costing may not represents actual cost of
preparation,since in reality,there would be a lot of adjustments in
ingredients use because the recipe has not been standardized.

The price list shows the current market price or price quotations for the
ingredients needed.The current market list,grocery list,and purchase orders
are used as the source for this list.It is important to remember that price list
Price List has to be updated regularly as price fluctuations are common in the
market.Establishments that use computerized inventory management
systems such as FIDELIO or HARMONY can easily generate a current
price list since purchasing,production,and accounting are all connected
with each other.
A cost worksheet is a tool to record the cost of a certain recipe and
thus aid in calculating the total cost of a standardized recipe.It is a
.
tabular worksheet that aims to organized and make costing easier to
Recipe Cost accomplish.The cost worksheet may differ in form and content
Worksheet depending on the food service establishment.However,they all usually
supply the same bottom line information:the exact cost to produce one
serving (unit cost or Cost per portion).The recipe cost worksheet also
usually includes the following information as shown in the sample
worksheet in illustration 10.1.

1.Recipe Name
2.Recipe Referrence Number(Recipe File No.)
3.Yeild or Portion size
4.Date of Costing
5.Ingredients
6.AP Quantity
7.EP Quantity
8.Purchase Price
9.Cost Unit as Purchased
10.Extension Cost
11.Total Recipe Cost
12.Unit Cost or Cost Per Portion
RECIPE COST WORKSHEET
File Number:
Recipe Name:
Yield:
Cost Date:
Ingredients Quantity Quantity Purchase Cost Unit AP Extension
(AP) (EP) Price Cost

Total recipe Cost

Cost per Portion/Unit cost

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