Case Study Investigating Food Cost Shortly after taking over for the previous chef at Magnolia's, Chef Hendrix theorized their restaurant's current menu prices had not been changed for some time. After a quick calculation, he was confident most items were underpriced. He then decided to have a conversation with his boss, Chad, who was the food and beverage manager. Chad believed his assumptions but told Chef Hendrix they cannot simply raise the menu prices indiscriminately. Chef Hendrix agreed to go through both the latest inventory prices and all the menu recipes. Chef Hendrix discovered that the recipes did not correctly factor in yield percentages and edible portion costs. At this point, he believes using yield percentages and edible portion costs on all food ingredients will give him a more accurate calculation of every menu item's food cost, which will support the raising of menu prices. He wants to start with a simple recipe for Beef Barley Soup. Using the recipe card below, play the role of Chef Hendrix and calculate the per-portion cost on each bowl of Beef Barley Soup. You will need to fill in answers for Columns E, F, G, and H. Each column is explained below. Column A - Ingredient Name: This column gives you the name of the ingredients used in the recipe. Column B - As Purchased Cost (AP Cost): This is the dollar amount paid for each item. For example, price per pound for beef tenderloin is $23.00. Column C - Ingredient Amount Required: This column gives you the number of ounces needed of the ingredient for the recipe. Column D - Yield Percentage: This column gives you the yield percentage. For example, purchasing a top round from your vendor requires meat fabrication. The chef will butcher the top round and have approximately 22 percent of trim or waste 100% -78% = 22% 100% -78% = 22%. Common yield percentages for most produce and meat can be found in tables used by chefs (check online). Column E - Determine the factor: This column determines the factor. The factor formula is 100/yield percentage. For example, Beef Tenderloin yield = 70% Factor = 100/70 = 1.42 Column F - Edible Portion Cost per ounce: This column shows the edible portion cost per unit. The formula is factor x as purchased cost per unit = edible portion cost. For example, Beef Tenderloin $23.00x1.42=$32.66/lb $23.00 x 1.42 = $32.66/lb. Column G - Total Cost: This column gives you the total of the ingredient to make the recipe. As Ingredient Yield The Factor Edible Total Cost Ingredient Name (A) Purchased Amount Percentage (E) Portion (G) Cost (B) Required (D) Cost per (C) ounce (F) Beef Stock $1.25/qt 256 100% Top Round $3.50/lb. 56 78% Celery $1.60/lb. 24 80% Onions $1.30/lb. 24 90% Carrots $1.50/lb. 24 95% Barley $1.80/lb. 16 100% Spice etc.: This is a shortcut spice factor. You can take your subtotal and multiply it times .03 (3%). The shortcut spice factor is common in recipe calculations and is used on recipes with simple spice ingredients (salt, pepper, garlic powder, etc.) It is recommended that you list out all spices when working with a complex recipe (e.g. Paella or Chicken Mole). Note: 1 quart = 32 fluid ounces 1 pound = 16 ounces What is the cost per portion for Beef Barley Soup? Beef Barley Soup Recipe Card Yield: 50 8-ounce portions Discussion Question After completing the calculations, your next step is to present your findings to the food and beverage director. Did your calculations support your theory that menu prices needed to be raised? Why or why not? Case Study Investigating Food Cost Shortly after taking over for the previous chef at Magnolia's, Chef Hendrix theorized their restaurant's current menu prices had not been changed for some time. After a quick calculation, he was confident most items were underpriced. He then decided to have a conversation with his boss, Chad, who was the food and beverage manager. Chad believed his assumptions but told Chef Hendrix they cannot simply raise the menu prices indiscriminately. Chef Hendrix agreed to go through both the latest inventory prices and all the menu recipes. Chef Hendrix discovered that the recipes did not correctly factor in yield percentages and edible portion costs. At this point, he believes using yield percentages and edible portion costs on all food ingredients will give him a more accurate calculation of every menu item's food cost, which will support the raising of menu prices. He wants to start with a simple recipe for Beef Barley Soup. Using the recipe card below, play the role of Chef Hendrix and calculate the per-portion cost on each bowl of Beef Barley Soup. You will need to fill in answers for Columns E, F, G, and H. Each column is explained below. Column A - Ingredient Name: This column gives you the name of the ingredients used in the recipe. Column B - As Purchased Cost (AP Cost): This is the dollar amount paid for each item. For example, price per pound for beef tenderloin is $23.00. Column C - Ingredient Amount Required: This column gives you the number of ounces needed of the ingredient for the recipe. Column D - Yield Percentage: This column gives you the yield percentage. For example, purchasing a top round from your vendor requires meat fabrication. The chef will butcher the top round and have approximately 22 percent of trim or waste 100% -78% = 22% 100% -78% = 22%. Common yield percentages for most produce and meat can be found in tables used by chefs (check online). Column E - Determine the factor: This column determines the factor. The factor formula is 100/yield percentage. For example, Beef Tenderloin yield = 70% Factor = 100/70 = 1.42 Column F - Edible Portion Cost per ounce: This column shows the edible portion cost per unit. The formula is factor x as purchased cost per unit = edible portion cost. For example, Beef Tenderloin $23.00x1.42=$32.66/lb $23.00 x 1.42 = $32.66/lb. Column G - Total Cost: This column gives you the total of the ingredient to make the recipe. As Ingredient Yield The Factor Edible Total Cost Ingredient Name (A) Purchased Amount Percentage (E) Portion (G) Cost (B) Required (D) Cost per (C) ounce (F) Beef Stock $1.25/qt 256 100% Top Round $3.50/lb. 56 78% Celery $1.60/lb. 24 80% Onions $1.30/lb. 24 90% Carrots $1.50/lb. 24 95% Barley $1.80/lb. 16 100% Spice etc.: This is a shortcut spice factor. You can take your subtotal and multiply it times .03 (3%). The shortcut spice factor is common in recipe calculations and is used on recipes with simple spice ingredients (salt, pepper, garlic powder, etc.) It is recommended that you list out all spices when working with a complex recipe (e.g. Paella or Chicken Mole). Note: 1 quart = 32 fluid ounces 1 pound = 16 ounces What is the cost per portion for Beef Barley Soup? Beef Barley Soup Recipe Card Yield: 50 8-ounce portions Discussion Question After completing the calculations, your next step is to present your findings to the food and beverage director. Did your calculations support your theory that menu prices needed to be raised? Why or why not