CATERING
Chapter 3
Pricing For Profit
Learning Objectives
By the end of this chapter you should be able to:
Effectively calculate prices for specific catering menu items
Use a pricing formula to set menu prices
Understand the two main components of business overhead
Calculate food and beverage costs and their percentage as it
relates to sales
Understand the relationship between supply and demand of
food and beverage products and how they affect costs
Maximizing Profitability
Profits on services offered/types of services
Liquor license and profit
Calculating Price
Pricing Formula:
OVERHEAD + MATERIALS+ LABOR+ PROFIT = PRICE
Calculating Price
Overhead
Materials
Labor
Profit
Calculating Food Cost
Definition of food cost and importance
Consistency of food cost
Factors affecting food cost (theft, arbitrary pricing)
Food cost percentage
Calculating Food Cost
Recipe costing form
Inventorying assessment
Markups on food and liquor
Portion control
Pricing for Profit
Greenfields Catering Apple Pie
Ingredient Unit Cost
Flour, 8 ounces $0.10
Butter, 8 ounces $2.15
Apples, 8 Granny Smith $2.20
Sugar, 4 ounces $0.50
Ground cinnamon, 1 tsp. $0.05
Unit cost for pie $5.00
When you have a food cost for an entire recipe, then you can arrive
at the cost per serving. If the apple pie serves 8, your cost per
serving is:
Cost per serving = Recipe cost is $5.00
Number of servings is 8
Greenfields Catering Apple Pie costs $0.625 per serving.
Computation of Monthly Food Cost
Opening Inventory + Purchases Closing Inventory = Cost of Food Sold
Opening Inventory $
+ Purchases $
Closing Inventory $
= Cost of Food Sold $
Cost of Food Sold Total Sales = Food Cost Percentage
Cost of Food Sold $
Total Sales $
= Food Cost Percentage %
Availability of Product
Cost and availability
Seasonality of ingredients and factors affecting availability
Types of purveyors
Specialty items
Key Terms
Pricing formula
Overhead costs
Fixed expenses
Variable expenses
Materials
Labor costs
Profit
Food cost
Food cost percentage
HOW MUCH?
A Food Costing Tutorial
Chicken
Piccata
(serves
10)
10
whole
8
oz.
Chicken
Breasts
(pounded)
4
oz.
Capers
(in
brine)
2oz.
All
Purpose
Flour
6
oz.
Dry
White
Wine
2
oz.
Canola
Oil
0.25
oz.
Black
Pepper
0.25
lb.
Shallots
(minced)
FOOD
C
o.
Restaurant
Suppliers
All
Purpose
Flour
..
$0.99/lb.
Capers
(8oz.
jar)
.
$3.99
Donovan
Parke
Chardonnay
(750ml
bottle)
$10.99
Canola
Oil
(1
gallon).
$15.00
Shallots
$1.48/lb.
Black
Pepper
(1
lb.
bag).
$8.00
Chicken
Breast
$5.50/lb.
How
much
will
it
cost
to
prepare
the
recipe?
How
much
will
it
cost
per
person?
How
much
should
he
charge?
Food Cost Form
Menu
item:
___________________________________
Number
of
servings:
___________________________
INGREDIENT
QUANTITY
COST
PER
UNIT
TOTAL
COST
TOTAL
RECIPE
COST:
Cost
per
Serving:
$
________________
Menu
Price:
$
________________
Step
1:
IdenGfy
your
ingredients
Do:
Use
the
table
page
to
ll
in
the
ingredient
list,
and
the
quan5ty
needed.
Step
2:
Break
down
your
cost-per-unit.
1
uid
oz
(4
tablespoons)
X
2
tablespoons
=
2
uid
oz
Convert
your
costs
into
usable
measurements.
$15
X
1
gallon
=
$0.12/oz
1
gallon
128
uid
oz
Do:
Fill
out
the
cost-per-unit
sec5on
in
the
food
cost
form.
This
should
be
the
price
PER
UNIT
of
the
ingredient.
Step
3:
Calculate
the
nal
total
cost
of
your
ingredients.
Do:
Now
just
mul5ply
the
two
together
to
get
your
total
cost
of
each
ingredient.
Add
them
all
up
and
you
have
the
total
cost
of
the
recipe.
Step
4:
Calculate
the
per-person
cost.
Do:
Find
the
per-person
cost
and
ll
it
in
the
table.
Step
5:
Name
your
price!
Do:
Calculate
the
per-person
cost
and
ll
it
in
the
table.
