STANDARD FOOD COSTING ( the easiest way)

Learn how to calculate the

-Buffer margin
-Cost of a specific ingredients
-Cost per serving



Key words:

TRFC - total raw food cost
AP      - as purchased / the amount of ingredients that you need
BM     - Buffer Margin

Here are the formulas:

Total Price         =  AP x  Price / Unit
TRFC                = just add all the total price
BM                    = TRFC x 10%
TRFC with BM  = TRFC + BM
Cost Per serving = TRFC with BM / serving per pax

MENU: carrot cupcake
SERVINGS : 12 pcs

AP	unit	Ingredients	Unit Price	Total Price
175	g	Flour	45.00/ 1000g	7.87
5	g	Baking soda	35.00/ 250g	0.7
2.5	g	salt	37.00/1000g	0.09
5	g	cinnamon	350.00/1000g	1.75
120	g	Pine nuts	40.00/500g	9.6
2	pcs	eggs	7.00/pc	14
135	g	sugar	50.00/ 1000g	6.75
160	g	oil	66.00 / 500ml	21.12
2.5	g	Vanilla extract	30.00/20ml	3.75
160	g	pineapple	22.00/234g	15.04
225	g	carrots	31.00/500g	13.95

  



 Solution:

STEP 1 

First you have to find the price of each ingredients, we have to solve for the price of flour.

AP x  Price / Unit = (price of flour)
 
      AP         Price     Unit ( unit is amount of ingredients when you bought it )
= (175g) x  45.00 / 1000g   (multiply the amount of ingredients that you need by the price of ingredients that you bought)

= 7875  / 1000g     (divide 7875 by amount of product that you bought)

TOTAL = 7.875 (total price of 175g of flour)

you can now calculate the rest of the ingredients using the same formula.


* the unit of AP should be the same unit of the amount of ingredients you bought.

STEP 2

TRFC
- just add all the total price

Total Price
7.87
0.7
0.09
1.75
9.6
14
6.75
21.12
3.75
15.04
13.95

TOTAL :  94.62 (TRFC)



STEP 3

FOR  BM  (Buffer Margin)

= TRFC x 10%
= (94.62) x .10

TOTAL =  9.46


STEP 4

TRFC with BM
= TRFC + BM
= 94.62 + 9.46

TOTAL = 104.08 (total price for 12 pieces)

STEP 5

Cost per Serving
= TRFC with BM / serving per pax
= 104.08 / 12

TOTAL =  8.67 per piece


     With the use of standard costing you can now determine how much you spent for  your product and how to give a price for it without any loss. You can use this in any food and beverage business.

If you have any questions just comment below. Thanks!