Technology and Livelihood Education

Grade 7/8
Learning Activity Sheet in Cookery –
Exploratory
Quarter 1 – Week 7
COST OF PRODUCTION

Prepared:

VIRGINIA B. CERILO
DepEd. CAR. Schools Division of Mountain Province
Sagada District. Sagada National High School
Republic of the Philippines
 DEPARTMENT OF EDUCATION
Cordillera Administrative Region
SCHOOLS DIVISION OF MOUNTAIN PROVINCE
Bontoc, Mountain Province 

Published
Learning Resource Management and Development System

COPYRIGHT NOTICE
2021

 
Section 9 of Presidential Decree No. 49 provides:

“No copyright shall subsist in any work of the Government of the

Philippines. However, prior approval of the government agency of office
wherein the work is created shall be necessary for exploitation of such
work for profit.”

This material has been developed for the implementation of K-12

Curriculum through the Curriculum Implementation Division (CID)—
Learning Resource Management and Development System (LRMDS). It can
be reproduced for educational purposes and the source must be
acknowledged. Derivatives of the work including creating an edited version,
an enhancement or supplementary work are permitted provided all original
work is acknowledged and the copyright is attributed. No work may be
derived from this material for commercial purposes and profit.

ii
PREFACE
 This module is especially prepared for the junior high school learners
to help them gain knowledge and skills on the Most Essential Learning
Competencies (MELCs) in Technology and Livelihood Education which is in
response to the implementation of the K to 12 Curriculum under the new
normal learning modes and deliveries.

This learning material provides varied activities that aim to improve

students’ knowledge and skills in calculating cost of production.

Date of Development : August, 2021

Resource Location : MPSDO, Sagada District, Sagada National
High School
Learning Area : Technology and Livelihood Education
Grade Level : Grade 7-8
Learning Resource Type : Learning Activity Sheet(LAS)
Language : English
Copyright : 2021`

Content Standards: The learner demonstrates an understanding of estimation and basic

calculations needed in the workplace.

Performance The learner accurately performs estimation and basic calculation

Standards: needed in the workplace
Learning At the end of the lesson, the learners are expected to:
Competencies:
a. Discuss principles of costing

b. Compute cost of production

Competency Code: Calculate cost of production/TLE_HECK7/8PM-

0e-5

Timeline: First Quarter/Week 7

 iii

ACKNOWLEDGEMENT

The developer wishes to express her gratitude to those who helped in the
development of this learning material. The fulfilment of this learning material would
not be possible without these people who gave their support and cooperation:

To her colleagues in the area of Technology and Livelihood Education for

sharing their references for the completion of this Learning Activity Sheet,

To the evaluator of this material, for her inputs.

To her family for the encouragement, prayer, and understanding.

Above all, the Almighty God for the unending blessings of wisdom, good
health, strength.

VBB

DIVISION LRMDS STAFF

ANDRES M. CUYASAN NIKKI T. MACABEO

Project Development Officer II Librarian II

DIVISION EVALUATOR

ROSELLE B. GALAP AGRIFINA M. LUMPISA JOCELYN P. SAMIDAN, EDd

Teacher Evaluator OIC, EPSvr-EPP/TLE EPSvr-LRMS

CONSULTANTS

KHAD M. LAYAG, EdD

CHIEF, Curriculum Implementation Division

VIRGINIA A. BATAN, CESE

OIC - Assistant Schools Division Superintendent

SALLY B. ULLALIM, CESO V

Schools Division Superintendent

iv
 TABLE OF CONTENTS

Page

Title Page …………………………………………………………………………. i

Copyright Notice ………………………………………………………………… ii

Preface ……………………………………………………………………………… iii

Acknowledgement ……………………………………………………………….. iv

Table of Contents ………………………………………………………………… v

Learning Competencies ………………………………………………………… 1

Directions / Instructions ……………………………………………………… 1

Background / Introduction …………………………………………………. 1

Exercises / Activities …..……………………………………………………. 3

Activity 1 ………………….…………………………………………………….. 3

Activity 2 ………………………………………………………………………… 4

Activity 3 ………………………………………………………………………… 5

Activity 4………………………………………………………………………… 5

Activity 5………………………………………………………………………… 6

Closure …………………………………………………………………………. 7

References …………………………………………………………................ 8

Answer Key ……………………………………………………………………… 9

v
 Learning Activity Sheet
TLE-Cookery(Exploratory)

Name of Learner:____________________________________Grade:__________
Signature of Parent/Guardian:_________________________ Date:___________

CALCULATE COST OF PRODUCTION

Learning Competencies
Calculate cost of production/TLE_HECK7/8PM-0e-5
Learning Objectives:
1. Discuss principles of costing
2. Compute cost of production
Directions / Instructions

In order to achieve the objective of this LAS, here’s a simple

guide for you.
1. Read carefully and understand the directions before doing
each activity.
2. Take note and record points for clarification.
3. Observe honesty and integrity in doing the tasks.
4. Do not crumple or make unnecessary marks on this
activity sheet.

Background Information
The food business remains as one of the top industries that entrepreneurs
consider highly profitable. It is also a very competitive market. However, delicious
offerings alone would not be enough to deliver business success. There are many
factors to consider, but the most basic is knowing how to determine your selling price
giving your consumers an affordable product with optimum profits. The following
steps shall be remembered when calculating the cost of production:
1. Write down your recipe, including all the ingredients and their quantities,
as well as the average yield. It helps to convert the quantity to measurable
equivalents.
2. Determine the price of each ingredient and calculate the cost per price.
Simply divide the ingredient price by the total volume and multiply it by the
equivalent measure in your recipe.
3. Add up the cost of the ingredients per receipt to determine the total recipe
cost. Add up the total cost of the ingredients per recipe to determine the total
recipe cost.

1
4. Divide the total recipe cost by the total yield to get the cost per serving.
5. Now add your mark-up to the cost per serving.

Definition of Terms
Markup is the amount added to the purchase cost to cover the
operating expenses and profit. Any person working in business or retail
will find the skill of being able to calculate markup percentage very
valuable.

Operating expenses is an expense incurred in carrying out an

organization’s day-to-day activities. This includes rent, labor, electricity
bill and etc.

Profit is a financial gain especially the difference between the

amount earned and the amount spent in buying.
Selling Price is defined as the price at which a good or service is
sold by a seller to the buyer. In other words, it is the exchange value or
agreed exchange value that enables a buyer to purchase goods or
services.
Purchase cost refers to the costs incurred from manufacturing a
product and services.
Cost of production is the sum of the purchase cost and the
operating expenses.
Yield refers to how much you will have of a finished or processed
product.

Principles of Costing
Food Costing: It is very important to know as it has direct effect on the
profitability of a restaurant. It is the cost of ingredients and does not include
other costs, such as labor and overheads. Food costing is an essential tool
in determining whether food costs targets are being met.
Basic recipe costing: The following are some of the reasons why it is a
need to understand the basics of recipe costing:
⮚ Know how much food cost is incurred on each recipe. This gives a
clear view of how much to earn per dish.
⮚ Understand how to properly allocate the price of the food product to
achieve the target profit.
⮚ Study the way the competitors allot price to their food products
against an industry benchmark.
⮚ Know when to reduce a recipe cost. Be updated with the costing.
Food Costing Tools: The following tools and calculations are important in
deriving food costs:

2
 ⮚ Standard Recipe: Costing based on standard recipe makes it easy to
compute food costs based on serving that are needed.
⮚ Up to date ingredient costs: Current prices should be the basis of
costing, thus it is a need to do a price check from time to time.
⮚ Recipe cost sheet: For recording data and all information about the
recipe such as current unit cost, actual ingredient cost and cost per
portion.

Computation of the cost of production

For example, Denver plans to serve pinikpikan in his restaurant, how does he
compute for the cost of production? Let us help him do it step by step.
A. Prepare the recipe for pinikpikan and assign their actual unit price to get
the total cost.
Quantity Unit Particular/Item Unit Cost/Amount
Cost/Price
1.5 Kilogram Live chicken 180.00 270.00
s
¾ Kilogram Sayote 40.00 30.00
s
½ Kilogram Etag (smoked meat) 350.00 175.00
s
2 Tbsp Salt(1 kgs=59vv0y tbsp) 20.00 .75
2 Tsp Black pepper(1 1.00 2.00
sachet=1tsp)
Total Purchase Cost 477.75
1. In the computation of the cost of 1.5 kg of live chicken, follow the
procedure below:

Step 1: Write the given in ratio and proportion.

1kg chicken: ₱180.00 = 1.5kg chicken:X

Step 2: Multiply the outer values (extremes) then equate it to the product of
inner values (means)

1kg chicken: ₱180.00 = 1.5kg chicken:X

or
 1kg chicken (X) = 180 (1.5 kg chicken)

Step 4: Find the values of x by dividing both sides by 1 kg chicken and

canceling common units of measurement.

3
1kg chicken(x) = ₱180.00 (1.5kg chicken)
1kg chicken 1kg chicken

Step 5: Perform the required mathematical operation.

X = ₱180.00 (1.5)
= ₱270.00

2. For the second and third row or item which are sayote and etag, apply the
same procedure with row 1 or the first item

3. For the fourth item, you notice that the unit of measurement used on the
needed ingredient is on tablespoon. However, the salt is sold per kilogram
in the market and 1kg is approximately 59 tbsp. Below shows the
procedure in getting the exact cost of the needed salt.

Item cost = ₱20 x 2tbsp

59tbsp

=.3389 X 2 = .67

4. To get the total cost of all the ingredients needed for the pinikpikan, simply
add all the item cost/amount.

Purchase cost = 270.00 + 30.00 + 175.00 + .75.00 + 2.00

Purchase cost = ₱477.75

B. Determine the selling price

To compute for the selling price, we need to set a markup percentage to

compute for the mark up .
selling price = Purchase
For instance, let’s set 50% as the percentage markup. cost + Markup
markup = expenses X %
markup
Mark-up = Expenses X % markup
 = 477.75 X .5
Markup = ₱238.87

To get the selling price, add the mark-up with the total cost of
production.
4
Selling price = Purchase cost + mark-up

= 477.75 + 238.87

Selling Price = ₱716.62

Activity 1: Give me a price!

Situation: Your aunt knows that you are good in baking so she ordered 2
pans of carrot cake for the birthday of her son. How much will she pay for
the cake?

Directions:
a. Make your own recipe for the carrot cake and assign the price list of the
ingredients.

b. Compute for the selling price of the 2 (16’ by 8’) pans?

Recipe: Carrot cake

Quantity Unit Particular/Item Unit Cost/Price Cost/Amount

Total Purchase Cost

 1.) From the data above, complete the diagram below.

Mark-up FORMULA
SOLUTION with the ANSWER

SOLUTION with the ANSWER

SELLING PRICE

FORMULA

Activity 2: Discussion
Directions: Enumerate 3 principles you’ve used in activity 1 and discuss
each using 2-3 sentences.

Activity 3: Complete me

Directions: Fill in the blanks with the appropriate letters in order to come up
with the right word that is being described.

1. M__r__ - __ _ This is the amount added to the purchase cost

to cover the operating expenses and profit.
2. __ r _ _ i _ This is the financial gain especially the
difference between the amount earned and
the amount spent in buying.
3. _p_ _a_i_ _ It is an expense incurred in carrying out an
E_ _e_ _e_ organization’s day-to-day activities. This
includes rent, labor, electricity bill and etc.
4. _ _ l_ _ n _ It is defined11as the price at which a good or
 P___e service is sold by a seller to the buyer.
5. _u _ _h _ s _ This refers to the costs incurred from
_o _ _ manufacturing a product and services.

Closure
The activities required your knowledge
6 and understanding on the principles of
food costing and skills in computation. In this manner, you applied the lessons
learned in the area of Mathematics and English.
Successful entrepreneurs/businessman did not reach what they are now with
out landing on the first step which you are in today. They have encountered a lot of
challenges but did not give up, they keep going.
As a future entrepreneurs, remember the lesson with this diagram:

Markup

Total
Selling
Cost
Price
Principles
of Costing

Purchase
Yield Cost

Were you able to do all the activities correctly? If yes, “Congratulations” if not,
its okey, you can always go over it until you will understand. Remember the quote,
“Success is not final; failure is not fatal; it is the courage to continue that counts.”
-Winston Churchill.
References
Cookery 7/8 Learners’ Material 7

Lopez, Brian Roy C., Leah C. Martin-Lundag., and Kenneth Adrian P. Dagal.
Business Math. Quezon City:Vibal Group Inc., 2016
https://www.slideshare.net/cathiprofitko/food-costing-57433581. Retrieved on
September 9, 2020
https://www.chegg.com/homeworkhelp/definitions/selling-price 37#:~:text=Selling
%20price%20is%20the%20price,margin%20set%20by%20the%20seller. Retrieved
on September 7, 2020
https://www.kawalingpinoy.com/filipino-style-macaroni-salad/ . Retrieved on
September 9, 2020
 8
ANSWER KEY

Activity 1
1. Answers may vary
Activity 2
1. Answers may vary
Activity 3
Mark-up
Profit
Operating Expenses
Selling Price
Purchase Cost
9