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Infotech Development Systems Colleges, Inc.

Natera Corner P. Timog Street, Dunao Ligao City 4504
Telephone No. (052) 202-1949 || 091788126
E-mail address: idscollegesinc@gmail.com || idscolleges@yahoo.com

Course Title : FOOD AND BEVERAGE COST CONTROL

COURSE CODE : HM ELECT 5
COURSE CREDIT : 3 UNITS
PROGRAM : BSHM
Year Level/Sem : 3RD and 4th year, 1ST SEM

TOPIC : FOOD PRODUCTION PROCEDURE

I. Introduction

As pointed out, a food service operation must be viewed as a complex array of interrelated
systems, each of which has special goals. The purchasing system, for example, is designed to
ensure the availability of an adequate supply of the ingredients required for food production,
each of a carefully selected quality and acquired at an optimum price.

The best means for ensuring that the purchasing system will achieve its aims—that purchasing
events will conform to plans—was shown to be instituting a control process. This is true not
only for the purchasing system, but also for the systems designed for receiving, storing, and
issuing foods. As we will see, it is equally true for the production system.

Following the pattern established in earlier topics, we will now describe the application the
process of control to the production phase of food service operation.

II. Objectives

At the end of the topic, you should be able to:

1. Explain the importance of standard portion sizes, standard recipes, and standard portion
costs to food service operations.
3. Calculate standard portion costs.
4. Calculate a selling price based on food cost percentage. .
6. Describe the levels of knowledge and skill needed by food production employees, and
explain the effect of these on the approaches management takes to training food production
workers.

III. Content

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Establishing Standards and Standard Procedures

The standards and standard procedures for production control are designed to ensure that all
portions of any given item conform to management’s plans for that item and that, as far as
possible, each portion of any given item is identical to all other portions of the same item.

Portions of a given menu item should be identical to one another in four respects:

1. Ingredients
2. Proportions of ingredients
3. Production method
4. Quantity

To reach this goal, it is necessary to develop the following standards and standard procedures
for each menu item:

1. Standard portion size

2. Standard recipe
3. Standard portion cost

Standard Portion Size

One of the most important standards that any food service operation must establish is the
standard portion size, defined as the quantity of any item that is to be served each time that
item is ordered. In effect, the standard portion size for any item is the fixed quantity of a given
menu item that management intends to give each customer in return for the fixed selling price
identified in the menu. It is possible and desirable for management to establish these fixed
quantities in very clear terms. Every item on a menu can be quantified in one of three ways: by
weight, by volume, or by count.

Weight

Weight, normally expressed in kilos, is frequently used to measure portion sizes for a number
of menu items. Meat and fish are two of the most common. Steak, for example, is served in
portion sizes of varying weights, with the particular size for a specific restaurant being set by
management. Vegetables, particularly those purchased frozen, are commonly portioned by
weight as well.

Volume

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Volume is used as the measure for portions of many menu items. Liquids (soups, juices, coffee,
and milk, to name a few) are commonly portioned by volume expressed as liquid ounces
(milliliters in the metric system). A cup of soup may contain 5 ounces, and a bowl of soup may
contain 8; a portion of orange juice may be 3 or 4 ounces; coffee may be served in a 5-ounce
portion; a glass of milk may contain 8 or 10 ounces.

Count

Count is also used by food service operators to identify portion size. Such items as bacon, link
sausage, eggs, chops, shrimp, and asparagus are portioned by count. Some foods are
purchased by count, and this plays a major role in establishing portion size. Shrimp, for
example, are purchased by number per kilo and then portioned by number per shrimp cocktail
(4 or 5 in one order). Count is important even with some dessert items, such as pie, with the
portion size expressed in terms of the number of slices of equal size to be cut from one pie.

An interesting variation occurs with those items portioned by means of implements such as
scoops or slotted spoons. A portion size is stipulated to be one or more such measures, but the
measuring device selected holds a particular quantity of the item to be portioned. In one sense,
the item in question is portioned by count, yet in another sense, it is portioned by volume.

There are many devices available to help the food service operator standardize portion sizes.
Among the more common are the aforementioned scoops and slotted spoons, but there are
many others, including ladles, portion scales, and measuring cups. Even the number scale or
dial on a slicing machine, designed to regulate the thickness of slices, can aid in standardizing
portion size: A manager may stipulate a particular number of slices of an item on a sandwich
and then direct that the item be sliced with the dial at a particular setting.

Standard portion sizes help reduce customer discontent, which should be viewed as a major
cause of customer loss and lost sales. If standard portion sizes are established and served, no
customer can compare his or her portion unfavorably with that of another customer and feel
dissatisfied or cheated. In addition, repeat customers will be more inclined to believe that they
receive fair measure for their money on each visit.

Standard portion sizes help to eliminate animosity between kitchen staff and dining room
personnel, which can lead to delays in service and make personnel antagonistic to patrons.
When portion sizes are left to the whims of the kitchen staff, arguments can and do develop
over whether or not a certain cook is giving larger portions to one particular server to give his
or her customers, thus ensuring larger tips, which can be shared with the cook.

Standard portion sizes also help to eliminate excessive costs. Cost for any given item varies
with the quantity served, so the cost for any item is closely linked to the quantity served to the

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customer. It stands to reason that an 200 grams portion of an item costs twice as much as a
100 grams portion of the same item. If 100 grams cost P 80.00, 200 grams will cost P160.00.

STANDARD RECIPES

Another important production standard is the recipe. A recipe is a list of the ingredients and
the quantities of those ingredients needed to produce a particular item, along with a procedure
or method to follow. A standard recipe is the recipe that has been designated the correct one
to use in a given establishment.

Standard recipes help to ensure that the quality of any item will be the same each time the
item is produced. They also help to establish consistency of taste, appearance, and customer
acceptance. If the same ingredients are used in the correct proportions and the same
procedure is followed, the results should be nearly identical each time the standard recipe is
used, even if different people are doing the work. In addition, returning customers will be more
likely to receive items of identical quality.

Any recipe can be adopted as a standard recipe. Sometimes such recipes are taken from
cookbooks or magazines. Sometimes they are developed by the chef in a given restaurant, then
tested and modified until they result in the production of an acceptable product. At that point,
the recipe becomes the standard—the recipe that will be used each time the product is to be
made.

STANDARD PORTION COST

A standard portion cost can be calculated for every item on every menu, provided that the
ingredients, proportions, production methods, and portion sizes have been standardized as
previously discussed. In general, calculating standard portion cost merely requires that one
determine the cost of each ingredient used to produce a quantity of a given menu item, add
the costs of the individual ingredients to arrive at a total, and then divide the total by the
number of portions produced. However, there are several techniques for doing this.

Before considering the several different ways of determining portion costs, it is important for
the student to understand that the portion costs determined by these techniques will only be
calculated portion or planned portion costs. These indicate what portion costs should be. Real
portion costs may be quite different. There are many possible reasons for this variance. For
example, if the employee making shrimp cocktails gives customers seven shrimp rather than
five (the number established by management as the standard), the real portion cost will be
greater than the calculated or planned cost. If the employee gives customers three, the real
portion cost will be less than planned. Real portion costs for these shrimp cocktails may be

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either higher or lower than planned, depending on whether customers have been given too
many or too few shrimp.

Real portion costs will also be different from planned costs if employees fail to use portion
scales, use improper portioning devices, fail to follow standard recipes, or purchase ingredients
other than those stipulated by standard recipes. If the standard seafood pasta recipe were
prepared with lobster instead of shrimp, it is quite clear that real portion costs would be higher
than planned.

Calculated, or planned, portion costs are best known by the term standard portion costs.
Standard portion cost is defined as the peso amount that a standard portion should cost, given
the standards and standard procedures for its production. The standard portion cost for a given
menu item can be viewed as a budget for the production of one portion of that item.

There are several reasons for determining standard portion costs. The most obvious is that one
should have a reasonably clear idea of the cost of a menu item before establishing a menu
sales price for that item. For control purposes, there are additional reasons, including the need
to make judgments in the future about how closely real or actual costs match standard costs,
as well as the extent to which operating efficiency can be improved.

Calculating Standard Portion Costs

There are several methods for calculating standard portion costs for easier understanding we
will concentrate on the use of Recipe detail and cost card to compute for the portion costs.

Owners, managers, chefs, and others with responsible positions in food service should be
familiar with use all of this method.

Recipe Detail and Cost Card

For menu items produced from standard recipes, it is possible to determine the standard cost
of one portion by using a form known as a recipe detail and cost card.

A standard recipe yields a predetermined number of standard portions. Thus, it is possible to

determine the standard cost of one portion by dividing the number of portions produced into
the total cost of preparing the recipe. To find the total cost, one lists each ingredient and
quantity from the standard recipe on the recipe detail and cost card and then multiplies the
quantity of each ingredient by the unit cost for that ingredient.

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Recipe Detail and Cost

Menu Item : Carbonara Fettucine Cost Date : January 4, 2021

Yield : 20 pax Portion Size : 100 grams pasta and 100 grams sauce

INGREDIENTS UNIT OF Quantity UNIT COST TOTAL COST

MEASURE ( as per recipe) (as purchased) (for each
(as purchased) ingredient)
Fettucine kg 1 120.00 120.00

Sweet Ham kg 1/2 280.00 140.00

Mushroom can 1 50.00 50.00

Fresh Milk Liter 6 cups 90.00 135.00

msg pack 2 tsp 10.00 2.22

All purpose pouch 1 pouch 50.00 50.00

Cream

Olive Oil liter 1/2 cup 100.00 12.50

onion kg 3 pcs 160.00 15.00

Bell pepper kg 1/8 220.00 27.50

Bacon kg 1/4 280.00 70.00

Salt pack pinch 10.00 1.00

TOTAL RECIPE P723.22

COST

Reference:

1 kg Onion = 32 pieces, therefore Divide P 160.00 by 32= P 5.00/onion

1 pack Msg = 3 Tbs , therefore P 10/3= P 3.33/Tbs, 1 Tbsp = 3 tsp, P 3.33/3= P 1. 11 per tsp
Fresh Milk is purchased at 1 liter, where 1 liter = 4 cups, then proceed to multiply

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In the example given, the second ingredient is 1⁄2 kilo of sweet ham. If 1 kilo costs P280.00, then
1⁄2 kilo costs P 140.00; that figure is entered in the column on the right headed Total Cost.

The Unit of Measure column presents the most common measurement available in the market.
The Quantity column represents the needed quantity per ingredients as specified in the
standardized recipe. The unit cost indicates the price as purchased in the market with the Unit
of Measure as basis. The total cost is computed when Quantity is multiplied with Unit Cost.

Determining the cost of an ingredient can sometimes be rather complex. If, for example, a
recipe calls for three diced onions, it will be necessary to determine the number of average-size
onion in a kilo and then determine the price of one onion by dividing the total number into the
price of the kilo of onion.

1 kg Onion = 32 pieces, therefore Divide P 160.00 by 32= P 5.00/onion

For some ingredients, the measurement from the recipe is different from the unit of
measurement in the market, hence, there will be a need to analyze and convert the item
accordingly.

For example : (as shown on table)

1 pack Msg = 3 Tbs , therefore P 10/3= P 3.33/Tbs, 1 Tbsp = 3 tsp, P 3.33/3= P 1. 11 per tsp
Fresh Milk is purchased at 1 liter, where 1 liter = 4 cups, then proceed to multiply

For inexpensive ingredients used in small quantities, such as “a pinch of salt,” it is not
worthwhile to calculate the actual value. For such ingredients, the figure entered is some token
amount, usually more than enough to cover the cost.

After calculating for the total cost of one recipe, the next step is to compute for the portion
cost of each serving, using the formula:

Standard Portion cost = Total Recipe Cost

Yield

= P 723.22
20
Standard Portion cost = P 36.16/ per serving of Carbonara Fettucine

As long as ingredients of standard quality are purchased as specified and at relatively stable
market prices, this should be the cost of producing one standard portion.It must be recognized
that standard costs of standard portions must be recalculated as market prices of the
ingredients change.The frequency of the recalculations will depend largely on conditions in the
market, as well as the availability of personnel to do the calculating. With the increase of prices
of raw materials at present , one must be careful to check if the recipe card still reflects the

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unit price of each ingredients if it is still applicable. Note that on the example used, the cost
date is already set at January 2021 to update the adjustment on current market prices.

After calculating the Standard Portion Cost of our Carbonara Fettucinee, we now know that a
100 grams of pasta and 100 grams of sauce(as indicated in the recipe card) costs P 36.16.

DETERMINING THE SELLING PRICE OF A DISH

After portion cost is established, compute the selling price by using any of the two methods:

1. Cost percentage method, using the formula:

Selling price = portion cost

Desired food cost %

Example if the portion cost of Carbonara Fettucine is P 35.16 and the desired food cost
percentage is 35%, then the selling price will be computed as

P 36.16 = P 103. 31/serving

.35

2. Mark-up factor method, computed as :

Selling price = portion cost x mark up factor

Where mark-up factor is equal to : 100 divided by the desired food cost percentage . If the
desired percentage is 35% the mark up factor will be

100 = 2.85
35

Selling price per serving of Carbonara Fettucine = P 36.16 x 2.85 = P 103.31/serving

The food cost to be used varies among the food establishments, depending on the desired
mark-up. Fine dining restaurants that cater to high income groups can have a food percentage
ranging from 30-35 % of the selling price; casual dining usually follow a 40-45% food cost ratio
and student/employees canteen can go as high as 50-55% if the cost of operations is low. Note
that high food cost percentage entails lower mark up and lower prices;low food cost
percentage will require higher mark-up and higher prices.

In deciding the food cost percentage allocation, consider:

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a. The cost of operations particularly the fixed of rental , labor, etc. If the fixed cost is high and
takes as much 40-50% of the profit, the food cost percentage should be lower to give way for a
bigger mark up, otherwise nothing or too little is left for profit.

b. Consider the budget of the probable customers. A low food cost percentage means higher
mark-up resulting to higher prices. If the market is Class B or C, they may find the price too high
and it is unlikely for them to patronize the item.

c. Consider the prices of competitors of the same type of food service such as yours. If the
selling price is much higher than the competitors, guests will transfer to the counterpart.

IV. Activities
Quiz & Assignment
(Attached separate sheet for submission)

V. References

FOOD AND BEVERAGE COST CONTROL

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Student Name _________________________________

Quiz

Select a recipe of your choice and proceed to fill up the recipe detail and cost of each, calculate
the total recipe cost, portion cost, identify the food cost desired and the selling price per
portion. Indicate also the reference used. Ensure that Unit cost to be reflected are applicable in
the present time.

Recipe Detail and Cost

Menu Item : Cost Date : January 13, 2021

Yield : Portion Size :

INGREDIENTS UNIT OF Quantity UNIT COST TOTAL COST

MEASURE ( as per recipe) (as purchased) (for each
(as purchased) ingredient)

TOTAL RECIPE
COST

PORTION COST

Food Cost %

Selling Price

Reference:

FOOD AND BEVERAGE COST CONTROL

Student Name _________________________________

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Assignment

Answer the following questions based on your own understanding

1. Enumerate some devices that can help the food service operator standardize portion sizes
and give examples of their appropriate usage to a particular food item.

2. Discuss the significance of a standardized recipe in the food production procedure in

controlling costs.

3. What considerations would you base the food cost percentage of your restaurant in the
future?

COST CONTROL/Food Production PROCEDURE/FDVILLACORTA