Food and Beverage Cost Analysis and Control Reviewer vulnerable to various forms of irregularities and abuses

such as thefts, pilferages and anomalous transactions.

TOPIC 1: Cost Control in the Foodservice These problems occur among companies where no
Industry effective control system is at work.

Lesson 1: Cost Control in the Food Service Control Problems Faced by the Industry

In the typical hospitality industry operation, as The business of food and beverage is having some
much as ninety percent of each sales money is used to pay special characteristics which makes it quite distinctive to
for costs. It is obvious that cost management must be an other business. Therefore, its special characteristics must
extremely important part of the successful management of be faced such as:
an establishment.
1. We have a very unpredictable business – sales
Cost Control in the Foodservice Industry and demands vary from day to day.
2. We deal with perishable raw materials – quality
Costs are generally defined as a reduction in the value of is diminished as time passes.
an asset for the purpose of securing benefit or gain, 3. We deal with raw materials which are basic to
however, in the food and beverage business, it means the man – pilferage and theft is high.
price to the hotel or restaurant of goods and services when 4. Service rendered is immediate – the cycle of
the goods are consumed, or services are rendered. operation is fast therefore speed is important.
Control is a process by which managers attempt to direct, 5. We deal with multiple low value transactions –
regulate and restrain the actions of people in order to records must be kept.
achieve desired goals. It is a management function used 6. There is a high degree of departmentalization –
in determining what is being done and evaluating the jobs performed varies even with a few personnel.
performance of the operation to apply the necessary 7. Unpredictability of menu mix and sales mix
corrective measures. 8. Short-Cycle of Catering Operation
9. Daily variation in food production.
Cost Control is the process by which managers attempt to
regulate costs and guard against excessive costs in every The Task of Cost Control
step of the operation. It refers to the control over all items Responsibility for every aspect of any food and
of income and expenses of a foodservice operation. beverage enterprise rests with management. Control,
Cost control is intended to carry out operations at therefore, is clearly a responsibility of management and
a reasonable cost without sacrificing quality of service employees.
and production. It is not synonymous with cost reduction. Persons Responsible for the Implementation of Control:
Costs should not be reduced at the expense of quality.
What is required is a standard (budget) that could produce 1. Cost Controller - ensures that staff are instructed
the desired quality and to make sure that the actual cost is and assisted in the completion of documents.
in keeping with such standard. ▪ ensures that all forms and procedures are
used and maintained.
The cost control system is designed to: ▪ ensures that the system is simple and
1. Establish standards and consumption limits. adapted and ensures the cooperation of
2. Point out and measure variances from the all.
standards. 2. Managers and Assistant Managers – account for
3. Localize trouble spots. the profitability and effectiveness of their areas.
4. Provide feedback to end-users and management 3. Department Heads – responsible for the actions
about variances. of staff and their department.
4. Control Clerks – responsible for bookkeeping
The Need for Control procedures and completion of accounting forms.
5. Storekeepers and Stock Controllers –
Good management is concerned with the
responsible for all goods received and maintains
effective and reasonable utilization of material and human
records of all stocks.
resources. These resources serve as input to generate the
6. Accounts Personnel and Cash Handlers –
desired output (results). But when the use of resources is
accounts for all money involved in the
not properly regulated, then the company becomes
 transactions and records these in the appropriate costs are useful tools in measuring the effectiveness ofan
document. operation and comparing standard costs with actual costs
7. All members of the staff should be cost and in order to determine the effectiveness of food and
control conscious. beverage material.
The Goals and Advantages of Cost Control Establishing Procedures
1. A simple cost control system will provide data to Procedures are the methods employed to prepare a
disclose the profitability of each revenue- product or perform a job. Standard procedures are those
producing department. that have been established as the correct methods, routines
2. An efficient system of cost control will reveal and techniques for the day-to-day operation of the
possible sources of economy and result in a business. Some of the standard procedures in the food and
rational utilization of materials and labor. beverage operation are:
3. Cost control data will provide the information
❖ Ordering and Purchase Procedures – are
necessary for making sound policy decisions,
standardized to ensure that the raw food and
avoiding hit or miss operation.
beverages are acquired in needed quantities and
4. It will facilitate comparisons to expose
qualities at favorable prices at the appropriate
unfavorable trends.
time.
Limitations of Control System ❖ Receiving Procedures – are standardized so that
all goods received conform as to quality, quantity
1. The Control System by itself will not cure all or
and cost to those ordered.
prevent problems from occurring. It will only
❖ Storing Procedures – are standardized to ensure
serve as fever-charts that would identify the
that received items are stored properly and in the
problems’ weaknesses and trends requiring
correct manner to be guarded against spoilage
curative measures.
and theft.
2. The system will require constant management
❖ Issuing Procedures – are standardized to ensure
supervision to ensure its efficient operation.
that food and beverage items are issued with the
3. It will need management action and vigilance.
proper use of documents to prevent theft or
Cost Control Techniques misuse.
❖ Production Procedures – are standardized to help
The food and beverage business lends itself to satisfy customers on a given item, so that the said
control because of the different problems faced by the items are produced by the same method, and with
industry. Therefore, by maintaining and analyzing the the same ingredients and portion size every time
food and beverage business, the manager could early it is served.
monitor and analyze the business, and weak links can be
identified and leakages stopped. At each stage of the Training Employees
operation, it is therefore necessary to institute control
By training personnel in the particulars of how
techniques. These techniques and devices depend on the
their jobs are to be performed, the manager in effect is
nature of the difficulty to be controlled, the situation, and
controlling. These instructions reflect the standards and
the styles of the individual making the selection. Some of
procedures that employees must follow. Teach employees
the control techniques that may be used include:
how a particular work is to be done given the standards
Establishing Standards and the procedures.

Standards may be defined as rules or measures Setting Examples

established for making comparison, and judgments. In
The behavior of individual employees in a food
food and beverage business, standards are used for
and beverage operation tends to be influence by the
successful control over operations.
actions, statements and attitudes of their leader. The
Quality Standards are used for the degree of manager’s behavior in performing any task will influence
excellence of raw materials and finished products. the way an employee will perform the same task.
Quantity Standards refers to measures of weight or count
Observing and Correcting Employee Actions
or volume. A Standard Cost is the agreed upon cost of
goods and services used to measure other costs. Standard
 The manager must continually observe employee Specification; Use of
actions, as they go about their daily jobs, to judge to Receiving Reports
actions and correct them at the appropriate time. Failure Storing Limitation of Access,
to correct would be taken to mean that such work is Classification of Stocks,
acceptable. Use of Tags and Labels,
Regular Inventory,
Requiring Records and Reports Reconciliation of Actual
vs. Expected Stock
Since in some large operations, the manager’s Balance.
observations cannot be direct, he must abstract Issuing Establishment of
information from records and reports. These records will Requisition Procedures,
be the basis for corrective measures. Use of Requisition
Forms, use of FIFO (First
Preparing and Following Budgets In, First Out) System
A budget is a realistic expression of business Production Use of Standard Recipe,
goals and objectives expressed in financial terms. It is Recycling of Left-Over,
therefore a forecast of sales activity and an estimate of Adherence to Standard
Serving Portions
costs. By comparing the actual financial performance to
Sales and Service Use of Service/Order
the forecasted budget, significant differences, if any, are
Slips, Issuance of
noted for purpose of corrective action. Receipts, Assurance of
Censuring and Disciplining Employees Guest Acceptance and
Comfort, Correct Selling
The main objective of censuring and disciplining Price
employees is to change or modify their job performance Accounting and Audit Documentation of
in order to control performance in such a way that job Transactions, Revenue
activity of each employee is consistent with the standards Reporting and
and procedures. Preparation of Financial
Statement
The Food Cost Control System Food Cost Analysis Measurement of
and Evaluation Departmental
Areas of Control Control Measures Performance and Total
Forecasting, Budgeting Establishment of sales Food and Beverage
and Standards Setting forecast, budget for each Outlet, Compare Actual
cost item, desired profit vs. Standard
and other performance Performance, Take
targets. Corrective Action,
Menu Planning Preparation of Menus, Evaluate Corrective
Recipe Standardization, Action
Costing and Pricing, Test
of Quality and Yield.
Purchasing Recognizing and Understanding Revenue, Expenses and Profit
Determining Needs, Use
of Purchase Revenue, expenses and profit are the three money
Specifications, related words that are important in any business
Calculation of operation. The following terms will be used
Requirements based on interchangeably: revenue and sales; expenses and costs;
accurate allocations and profit and income.
par stock, Searching the
Market, Conducting • Revenue is the amount of money you take in.
Negotiations and • Expenses are the costs of the items required to
Ordering operate the business.
Receiving Inspection of Stocks • Profit is the amount of money that remains after
against Quality Standards all expenses have been paid.
and Purchase
 All foodservice operations, including non-profit 2. Labor Cost - is the cost of employing staff, their
institutions, need revenue in excess of expenses if they are meal, accommodation and insurance.
to thrive. Profit is the result of solid planning, sound 3. Overhead Cost- are the expenses of running the
business such as rent, gas, fuel, electricity,
management, and careful decision-making. Simply put:
stationery, cleaning and laundry, advertising,
Revenue – Desired Profit = Ideal Expenses telephone, repairs, legal fees, insurance, etc.
4. Net Profit - is the reward of the capital investment
Desired profit is defined as the profit that the of the business.
owner wants to achieve on that predicted quantity of
revenue. Ideal Expense, on the other hand, is defined as Simple Profit and Loss statement
management’s view of the appropriate amount of expense
necessary to generate a given quantity of revenue.
Revenue varies with

• Number of guests
• Amount of money spent by each guest
In order to increase revenue, the business can:

• Increase the number of guests served

• Increase the amount that each guest spends
• Or a combination of both
Foodservice Business Flowchart

TOPIC 2: Forecasting, Budgeting and

Standards Setting
Lesson 2A: Forecasting Food and Beverage Sales
Forecasting Food and Beverage Sales
Operating a viable and profitable business starts
with specific, measurable, attainable, and realistic sales
forecast, also known as sales projection. Forecasted
figures can tell the operator whether the anticipated
revenue will be big enough to give him a good return of
Understanding and Analysis of Income (Profit and his investment, considering the high rate of rental or
Loss) Statement amortization, labor cost, food cost and other operating
expenses. A sales projection or sales forecast predicts the
The Profit and loss statement (P&L) lists number of guests a business will serve and the revenues
revenue, food and beverage cost, labor cost, other they will generate in each future time period. It also
expense, and profit. It is important because it indicates the provides figures that the food business will aspire to
efficiency and profitability of an operation. generate. With the sales target in mind, the management
can design product packages and marketing strategies that
The Uniform System of Accounts, published by
will enable them to reach their goal.
the National Restaurant Association, is used to report
financial results in most food service units. This system Importance of a Sales Forecast
was created to ensure uniform reporting of financial
results. 1. The sales forecast is an important tool for
decision making.
Factors Affecting Cost Control 2. Sales forecast serves as parameter for assessing
the progress of business.
1. Food Cost - is the material used in the production
of meals to be sold. It is expressed in terms of %
of income spent for food.
 3. It serves as a tool to provide an idea on the ➢ Covers
revenue from which the operator will pay basic ➢ Average Check
operating expenses and create a profit. ➢ Food Sales
4. The forecast is a motivating tool. ➢ Beverage Sales
➢ Net Profit
Advantages of Precise Sales Forecasts
1. Accurate revenue estimates
The following formula are used in predicting sales
2. Improved ability to predict expenses
forecast:
3. Greater efficiency in scheduling needed workers
4. Greater efficiency in scheduling menu item Gross Sales
production schedules
Seating Capacity X Turnover Rate X Average Check
5. Better accuracy in purchasing the correct amount
of food for immediate use Covers
6. Improved ability to maintain proper levels of
nonperishable food inventories Maximum Seating Capacity X Turnover
7. Improved budgeting ability Average Check per Customer
8. Lower selling prices for guests because of
increased operational efficiencies Total Price on Bill / Number of Guests
9. Increased money available for current facility
Daily Average Check
maintenance and future growth
10. Increased profit levels and stockholder value. Ave. Check for Breakfast + Ave. Check for Lunch + Ave.
Check for Dinner / 3
Mechanics of Sales Forecasting
Daily Sales
Revenue forecast is developed by making reliable
assumptions based on reliable data. For instance, Daily Covers X Average Check
forecasted sales for the succeeding year of operations may
be based on expected increase or decrease (in percentage) Monthly Sales
over the previous year’s performance. The projected sales Daily Covers X Average Check X No. of Operational
increase or decrease should be supported by information Days in a Month
on internal or external events and developments which are
expected to affect patronage. Some of these factors
include:
Forecasting for New Food Outlets
❖ Sales History – past revenue level can be
If the food outlet is just about to begin its
analyzed.
operations and there are no sales record, the best approach
❖ Current Factors – new competition, street
is to make projections based on an assumed occupancy
improvement projects, and other activities over
rate per month. Assumptions must however be realistic
which the operation has little, or no control may
and should take into consideration business trends. Such
affect sales level for the new budget period.
information may be gleaned from the experience of
❖ Economic Variables – price changes, as well as
neighboring competitors. A market survey can also
inflations takes its toll, the public’s habits and
provide significant data.
lifestyle change. This can affect repeat business.
❖ Other Factors – internal sales promotion plans, Here are some suggested steps to arrive at a sales forecast:
product diversification, remodeling and similar
activities scheduled for the coming year, 1. Determine the projected sales when the outlet is
competition, political tensions, etc., that may on full house.
create a need to adjust sales trend. Get data on the seating capacity, expected rate of
Determining Sales Forecasts turnover per meal period and average check (Average cost
of consumption per cover). Refer to menu prices.
The Sales Forecast for Food and Beverage Operation
should include:
➢ Gross Sales
 Food outlets that have been operating for at least
one year can derive their projections from the sales
records of the previous years. From these data, assume a
certain percentage of increase or decrease depending on
business trends. The succeeding year may follow the
same trend unless there will be positive or negative
developments that may change the trend.
For these types of operation, the sales history
would be a great benchmark against future projections.
The sales history is the systematic recording of all sales
achieved during a pre-determined time period. It can be
created to record revenue, guests served, or both. For
many other foodservice operations, sales are recorded in
2. Make assumptions on the Occupancy Rate per month. terms of sales revenue generated. It is important to record
Operation both the revenue and guest counts. Guest count is the
term used in the hospitality industry to indicate the
Since it is unrealistic to expect full house all the number of people you have served.
time, make assumptions as to the occupancy rate per
month based on observed business trends. Multiply the Nowadays, the POS (Point-of-Sale) System can
occupancy rate by the maximum monthly sales and the help speed up gathering data for forecasting sales. The
resulting figure is the projected sales for the month. POS systems give you:

• The amount of revenue you have generated in a

selected time period
• The number of guests you have served
• The average sales per guest\
The POS can also identify the number of a particular
menu item served, the number of guests served in a
specific meal or time period, or the method of meal
delivery (for example, drive-thru vs. counter sales.)

Let’s look at the following figures:

From this table, the Total Weekly Revenue is Php

439,354, a total of 1,931 guests were served with an
Assumption: Maximum Cover is set at 16,500. average sales per guest or average check per person at Php
219.37.
Covers is computed as: Maximum Covers X Occupancy
% Compute average sales per guest, a term is also known as
Maximum Covers is computed as Daily Cover X Days of check average.
Average Sales per Guest
Total Sales/Number of Guests Served
Forecasting for Existing Food Outlet
 A sales forecast can also be based on anticipated November 2020, a month-long event transpired reflecting
increase of covers and average check. The average check the 44% increase from the previous year.
is expected to increase when menu prices will increase
For average check, an increase of 5% has been
and when there is effective menu merchandising. The
maintained from January to July except for May where an
forecasted sales are computed by multiplying the number
event within the area of the establishment will happen,
of covers with the average check.
thus affecting an increase in cover and average check.
Another way to forecast sales is by looking at From August to November a 10% increase in average
sales variance from previous years, let’s look at the check has been forecasted due to new promotions for
following data: those months, and a 20% increase in December in
anticipation of the holiday season.

Lesson 2B: Budget Planning

Budget Planning
Budget Preparation in a business is very
important to limit the expenditures and to easily detect
variation in terms of profit and expenses. Too low or no
profit generated by the business despite good patronage
can happen when expenses are not controlled for the
Variance shows increase or decrease in trend based on following reasons:
existing data. This is computed as follows:
1. There is no budget that sets limit to consumption
and purchases.
2. There is no way of checking actual consumption
against budget (no budget monitoring). Excess in
consumption remain unnoticed and continue to
Percentage variance indicates the percentage change of accumulate.
one aspect from one time period to the next. 3. No one is made to account and be answerable for
variances in consumption.
These variances can be studied and employed in
4. No corrective measures are taken to correct
estimating increases or decreases in covers, average check
variances.
as well as based on different factors that affect the
business. What is a Budget?
A budget is a financial plan that indicates how
much revenue will be generated and how the revenue
should be spent in order to meet required financial goals.
The operating budget is a profit plan and a control
tool. It will constantly remind a manager about the
amount of expected revenue and the allowable levels of
expenses. By reviewing their document, one will know if
(and to what extent) economic goals are being attained.
Purpose of Budgeting
Notes:
Budgeting is used by most firms to aid in
For cover, figures are based on actual variance
controlling costs and to ensure that costs are kept in lie
with a slight deviation or increase in anticipation of
with forecast revenues. The main purpose of budgeting
effective marketing promotions. For May, figure is higher
could be summarized as follows:
in anticipation of an event that will happen on the said
month. November has decrease in projection since in ❖ To provide organized estimates of future
revenues, expenses, manpower requirements, or
 equipment needs, with estimates broken down by expense item from the sales operating budget. One can
time period and/or department. more or less follow this pattern in preparing the budget
❖ To provide coordinated management policy both for the succeeding years.
long-term and short-term, expressed primarily in
accounting terms.
❖ To provide a method of control so that actual
results can be evaluated against budget plans, and
adjustments, if necessary, can be made.
Budget Preparation
The formal preparation of the budget is a function
of the accounting department. The organization’s
controller would be a member of the budget committee.
His task is to prepare final budget information for
submission to the general manager for approval. The
following steps are followed in budget preparation:
1. Establish a monthly sales forecast covering food
and drinks. The total sales income for each month
is the base from which one derives expected
profits and expenses required to produce the sales
income. Refer to it as the sales operating budget.
2. After calculating the sales income, calculate or
establish the profit required from the sales. Some
companies have pre-determined budget for
profits, ranging from 10-20%.
3. Determine the operating Budget. If the desired
profit is 15%, then the operating budget is 85% of
the total sales. Topic 3: Food Cost Controls in Menu
4. Decide on the profit mark-up (Ratio of profit over
sales) that management wants to attain. This
Planning
usually ranges from 10-30%. Lesson 3A: Menu Planning
5. Allocate a certain cost percentage (ratio of cost
over sales) of every expense item from the total The Menu Planning Process
sales. Every foodservice establishment must see to it
A survey of industry practice reveals that the that menus and prices are designed to suit the target
allocation for food/beverage cost ranges from 35-50%, market and that costs and prices are able to maintain
payroll and expenses (including employees’ meals) prescribed food cost budget. Planning the menu
ranges from 15-24%, taxes at 2-10%, and the profit share undergoes the following planning and product
can range from 10-20%. The distribution varies development:
depending on the size and classification of the
establishment.
The allocated cost percentage serves as a ceiling for
expenditures, meaning that the operations should spend
only within the allowable cost percentage. Should
expenses exceed the limits, budget for other items will be
eaten up or reduced, or the expected profit itself will be
sacrificed.
To make budget allocations more realistic, the best
step is to stud the sales history and patterns of
expenditures, noting down the actual ratio of each
 personal preferences of the customer. To many, food
offers comfort and emotional satisfaction. Questions to
ask related to this include:

• Should Halal food be served?

• Are people here on-the-go and prefer to take
away meals?
Nutritional Requirements – the degree to which nutrition
influences the menu planning process depends on the type
of food service and market it serves. The menu planner
integrates nutrition to the extent that customers demand it
and are willing to pay for it. Recommended Daily
Allowance is used as a guide for ensuring that menus are
nutritionally sound. The RDAs specify nutrient levels for
various age groups by generation. Questions to ask related
to this include:

• Are there vegetarians in the area?

• Are there high-risk populations in the area which
have dietary restrictions?
Food Consumption, Trends, Habits and Preferences –
The menu planner must keep in mind when selecting food
to satisfy diverse groups. Food habits are based on many
Market Analysis influences, the most direct being the attitude of the parents
in the home about food and eating. These habits are
The menu planner should carefully study the passed down from generation to generation. In addition,
population to be served regardless of whether menus are the traditional three-meals-a-day pattern, with the entire
being planned for a commercial or non-commercial. To family has changed. People are eating fewer meals, to
be able to come out with a menu that is most acceptable accommodate this change in eating habits, a more flexible
to customers, it is advisable to first analyze the needs and meal schedule should be followed. Questions to ask
demands of the target market. This process is called related to this include:
market analysis.
• What are their food preferences?
Demographics - refers to the statistics of the population.
• What type of cuisine do they prefer?
Specific indicators include age, gender, health status and
• Do they prefer to dine in or prefer deliveries?
level of education. Economic information such as
personal income may also be included. Trends in this Organizational Menu Decisions
information are important to the menu planner because
eating habits vary among population groups and change A primary goal of a foodservice operation is to
frequently. Questions to ask related to this include: serve food that is pleasing to its clientele. However,
certain management factors must also be considered.
Allowing adequate time to complete the menu planning
process is essential to smooth implementation of the
• How much is usually spent for breakfast, lunch,
menu. The following are detailed descriptions of
dinner and/or snacks?
important menu planning considerations:
• Will kid’s meal be included in the menu?
1. Organizational Missions and Goals. The
Sociocultural Influences – refers to the combining of planned menu must be appropriate for the food
social cultural factors of a population. These factors service and consistent with its organizational
include mental status, lifestyle, ethnic background, values mission and goals. The menus must reflect the
and religious practices. These issues have a greater impact organization’s stated mission purpose as defined
on menu planning. Food plays an important role in our in the mission statement, meeting quality and
social lives. The wise menu planner comes service expectations.
knowledgeable about social influences and respects
 2. Budget Guidelines. Before any meal is planned, means that something has been subtracted from its
the amount of money that can be spent on food original weight to get the net usable product. In the
must be known. This income must generate process of preparing ingredients, there are natural losses.
adequate revenue to cover the cost of the raw Purchased ingredients must be cleaned, trimmed, peeled,
food, labor and operating expenses and allowance boned, and cooked before they are ready for sale. Because
for desired profit. of this, “waste and by-products” of processing have to be
3. Production and Service Capabilities considered in following a recipe and in eventually
A. Equipment and Physical Facilities. The purchasing and costing ingredients in the recipe. From the
menu planned for any given day must be original weight a certain amount or percentage weight is
one that can be produced in available lost leading to a higher actual food cost for a recipe.
workspace with available equipment.
Objective of Yield Testing
Care should be taken to distribute the
workload evenly for ovens, ranges, Yield Testing may serve a number of essential
mixers and other large pieces of functions in the food production establishment. It is
equipment. Refrigerator and freezer critical to maintain to maintain yield standards. If the
space must also be considered. The yield falls below standards, this may indicate ingredients
amount of China, glassware or tableware with lower quality, lowering profits because there is less
available may influence the service of product to sell. Also, if the quality decreases, the
certain menu items at the same meal. customers may be disappointed enough to complain or
B. Personnel. Available and skill of simply not return again. Yield testing is usually done by
employees are factors to consider when the production area in coordination with the cost control
determining the variety and complexity department in order to achieve the following goals:
of the menu and personnel helps the
planner to develop menus that can be 1. Guide how much and with what specifications
prepared with the available staff. Work materials are to be purchased. Because
schedules must be considered because processing must be done, losses and shortages
some foods require advance preparation. may happen and thus requires a higher purchase
4. Availability of food. The menu planner is requirement. Yield testing can also be used to
responsible for purchasing the food, he should be establish the description of how the materials are
abreast of new items on the market and be alert to to be ordered from suppliers.
foods that would add interest to the menu or that 2. Facilitate accurate costing and monitoring of
would improve the variety and quality of menu cost. By knowing the amount of loss, an accurate
items offered. account of material usage can be done which
5. Style of Service. The distance between the type make costing more accurate.
of preparation and the point of service should be 3. Facilitate pricing. Because yield testing leads to
considered, along with the elapsed time between accurate determination of cost, pricing of
completion of preparation and service. products is also facilitated. This is because we are
usually using cost-based pricing as the primary
Recipe Testing and Yield Analysis basis for determining selling price.
4. Improves profitability. Eventually, through
Once dishes constituting the menu have been
yield testing, production and purchasing can
chosen, the next step is to test the recipes and check the
better plan its activities, resulting to better profits
ingredients to consistency of yield. This can be done
for the establishment.
through yield analysis.
As Purchased (AP) and Edible Portion (EP) Weights
Yield analysis should be consistently made since
food products have variations on their usable parts from When using ingredients used direct from their
the raw state or raw product. To better understand yield packaging, for example flour or sugar, you can usually
analysis, we have to understand the concept of standard proceed without much difficulty. All you need is accurate
yield. measuring device. However, when dealing with
ingredients that must be cleaned, peeled, or trimmed, one
A standard yield means the weight, piece or
must be aware of the difference between what is known
volume of food or food ingredient after it has been
processed or made ready for sale to customers. This
as AP (as purchased) weight and EP (edible portion) Yield Tests
weight.
Yield tests basically provide the production planner a
• As Purchased Weight (AP) is a term used to means of estimating the yield of a food product. These
refer to the weight of the ingredient as it was yield tests are very useful tools in determining purchase
purchased. This is the weight before any specifications for ingredients that are needed by
processing has been done or simply weight direct production. There are different yield tests used in the
from the supplier. Both edible and non-edible kitchen and includes:
parts are still on the product.
• Raw Food Test – test for determining the
• The Edible Portion Weight (EP), on the other
standard yield of highly perishable ingredients
hand, is a term that refers to the weight of a
such as fish and shellfish, vegetables and fruits.
product after it has been thawed, cleaned, peeled,
• Canned/Bottled Test – test for determining the
trimmed, boned, and cut. Thus, it is simply the
standard yield of canned and bottled products
weight after all processing has been done. At this
such as cherries, pineapples, and olives.
point, all non-edible parts such as skin or bone of
the product has been removed. • Butcher’s Test – test for determining standard
yield of meat, poultry, and fish products after
thawing, trimming, and cutting.
Therefore, the EP and AP weight are mathematically • Cooking Test – test for determining standard
related. The edible portion is the net result after yield of meat, poultry, and fish after applying a
subtracting all processing losses. This is best described by cooking method.
the relationship below.
Lesson 3B: Recipe Standardization
Loss/Shrinkage/Waste = AP Weight – EP Weight
Recipe Standardization
From this same relationship we can establish the
standard yield percentage. In any food production operation, the most
important control tool is the standardized recipe,
Loss/Shrinkage/Waste % = sometimes referred to as a recipe formulation. A recipe is
said to be standardized when they have been tested and
Loss/Shrinkage/Waste x 100 revised to repeatedly produce good results adapted to the
requirements of a specific foodservice operations. They
AP Weight
ensure that the productions of products are consistent and
Or successful. Differentiated from a recipe, a standardized
recipe is characterized by the following qualities:
Standard Yield % =
EP Weight x 100 1. Tried and tested. The recipe is tested and adjusted
several times until the trial produces a product of
AP Weight
the desired quality and quantity.
2. Uniform product results. The end product of a
standardized recipe is consistent in quality, flavor
and appearance.
3. Standard Yield/Portion Sized Product. The
standardized recipe has been adjusted to produce
a yield based on the production needs of
operations.
4. Written in a standard format. The standardized
recipe must be recorded in a form that best suit
the production activities.
Benefits of a Standardized Recipe
The standardized recipe is one of the most
important tools in assuring high & consistent quality,
reliability & controlling cost in institutional food 6. Cooking Time and Temperature. Describes how
production. Standardized recipes result to several long and at what temperature the product is
advantages that are listed below: prepared.
7. Ingredients. A list of the required raw materials
1. Eliminates Guesswork. Guesswork would be
for the recipe.
eliminated by developing a standardized recipe
8. Converted Measure. An accurate description of
that uses standard ingredients, procedures, yield
how much ingredient is to be used and its
and portion size, used by production.
measuring unit.
2. Consistency and High-Quality Products.
9. Procedures and Methods. Describes the steps to
Customers are assured of the quality, quantity and
be undertaken to produce a satisfactory product.
taste of the product that they bought on their first
10. Date Revised. Indicates the date that the recipe
visit and provide them with the same satisfaction
was last reviewed and changed.
on their next visit.
3. Eases Costing. Because the standardized recipe
contains an exact list and measurement of
ingredients, the standardized recipe can easily be
cost.
4. Eases Training of Staff. The foodservice staff
can be easily trained and be provided with a
constant reference guide that would aid them in
the proper procedures and techniques to produce
products that are up to standards.
5. Minimize Left-over and Waste. The recipe can
serve as guide on amount of purchases &
requisition, minimizing losses due to spoilage &
overproduction. A Sample Standardized Recipe Card
6. Prevents Dependence. A standardized recipe Recipe Standardization Process
database can be accessed by other food
production staff without being dependent on any
one worker.
7. Facilitates control. The cost controller’s job is
facilitated when production uses and follows the
standardized recipe.
8. Saves Time. The testing of the recipe leads to
simplified and organized work procedures, thus
saves productivity time.
The Standardized Recipe Card
Generally, the standardized recipe card should include the
following information:
1. Recipe Name. Descriptive and creative name for
the recipe.
2. Product Classification. Describes under which
category the recipe belongs to (i.e. soup; salad;
entrée- vegetable, beef, poultry; dessert, etc.).
3. Recipe File Number. A filing number assigned to
each recipe card for easier organization, storage
and retrieval.
4. Recipe Yield. The total amount of the end product
or number of portions produced by the recipe.
5. Portion Size. Description of the amount of
product good for one serving.
Weight and Measure Conversions In order to convert one unit of measure to another,
it is best to use the principle of ratio and proportion. This
The careful use of weights and measure is very
entails basically four basic and simple steps.
important in food production. Such careful use assures not
only uniform products but also saves on material cost. Step One: Represent the Unknown as “X” and form the
Through proper knowledge of weights, measurement, and first ratio.
accurate conversion, understanding and correct execution
In forming the first ratio, determine the unknown
of recipes is facilitated. This results to accuracy and
measurement that will be converted to the given
consistency of the product quality as well as proper
measurement.
control of cost.
Step Two: Choose an appropriate conversion factor
There are basically two measurement systems
from the conversion table.
commonly used in food production, the Metric and
English systems. Unfortunately, the use of both systems The conversion factor selected from the
in recipe books and references are widespread. Therefore, conversion table will be used as the first ratio to solve the
an understanding of both systems is essential for the food problem. The units of measure found in this first ratio
producer. Whether it is better to use one over the other must contain both the unit of the unknown measurement
would be difficult since both presents certain advantages and the unit of the given measure. Do not forget that the
and disadvantage over each other. Below are the most second equation must have the same order as the first
common English and Metric Conversion: equation.
Step Three: Cross Multiply the two ratios.
Multiply the top left measurement with the
bottom right measurement and equate this with the
product of the bottom-left measurement and the top-right
measurement.
Step 4: Solve for the unknown measurement “X.”
Simply use algebraic transposition to solve for
the unknown. The units would be cancelled out just like
in any algebraic equation.

Working with Unit Conversions