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Calculating Selling Price for Recipes

1. There are two methods for setting the selling price of recipes: the food cost percentage method and the markup method. 2. The food cost percentage method sets the selling price based on a standard food cost percentage of sales to ensure profitability. 3. The markup method calculates the cost per portion, applies a markup factor based on the target food cost percentage, then adds the markup to the cost per portion to determine the selling price.

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Jeyan Nyle
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38 views7 pages

Calculating Selling Price for Recipes

1. There are two methods for setting the selling price of recipes: the food cost percentage method and the markup method. 2. The food cost percentage method sets the selling price based on a standard food cost percentage of sales to ensure profitability. 3. The markup method calculates the cost per portion, applies a markup factor based on the target food cost percentage, then adds the markup to the cost per portion to determine the selling price.

Uploaded by

Jeyan Nyle
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Setting the Selling Price

Steps in Setting the Selling Price


1. Choose the recipe.
2. Standardize the recipe.
3. Quantify the recipe
4. Cost the recipe.
5. Get the food cost per serving.
6. Set the selling price.
2 Methods of Setting the Selling Price
1. Food Cost Percentage method – a pricing method that uses a
standard food cost as percentage of sales that ensures profitable
operation.
Selling price = cost/ portion
food cost %
2. Mark up method – (cost plus) the money added to the recipe cost to
obtain a selling price.
Markup factor = 1
food cost %

Mark up = cost/portion x mark up factor

Selling price = cost/portion + mark up


Recipe Name: Cheesy Eggplant Layer
Servings: 8 persons
Food cost %: 15%
Food cost/portion: ______?
Ingredients: Vol./Count Cost/Unit AP Extension Cost
Eggplant 1 kl. P 38/ kg.
Eggs 3 pcs P 7/ pc
Spaghetti sauce 1c P 28/ 250 g
Bread crumbs 1c P 20/ 250 g
Bell pepper 3T P 100/ 1 kl.
Grated cheese 1¼c P 48/ 330 g
Recipe Name: Cheesy Eggplant Layer
Servings: 8 persons
Food cost %: 15%
Food cost/portion: ______?
Ingredients: Vol./Count Cost/Unit AP Extension Cost
Eggplant 1 kl. P 38/ kg. P 38.00
Eggs 3 pcs P 7/ pc 21.00
Spaghetti sauce 1c P 28/ 250 g 28.00
Bread crumbs 1c P 20/ 250 g 20.00
Bell pepper 3T P 100/ 1 kl. 4.50
Grated cheese 1¼c P 48/ 330 g 45.45
P 156.95
1. Food Cost/Portion = Total Cost = P 156.95 = P 19.62
# of portion 8

2. Markup factor = 1 = 1 = 6.67


food cost % 15 %

3. Mark up = cost/portion x mark up factor


= P 19.62 x 6.67
= P 130.87

4. Selling price = cost/portion + mark up


= P 19.62 + P 130.87
= P 150.49

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