Costing and Purchasing Notes

Costing: Control During Purchasing

Costing

  • Costing is an important part of budgeting and fiscal control.
  • It allows calculating the cost-per-serving of a meal.
  • It helps anticipate the cost of a food order.
  • Calculations include cost-per-serving, finding total cost, determining orders based on calculated servings, and cost for total orders.

Determining Cost Per Serving

  • To find the cost of one unit in a pack with many units, divide the as purchased cost (total cost) of the pack by the number of units in the pack.

  • The formula for Cost per serving:

    Cost per serving=As-purchased costNumber of units in a case\text{Cost per serving} = \frac{\text{As-purchased cost}}{\text{Number of units in a case}}

Single-Serve Items

  • Cost per serving calculation:

    Cost per serving=As-purchased costNumber of units in a case\text{Cost per serving} = \frac{\text{As-purchased cost}}{\text{Number of units in a case}}

  • Example: A case of juice has 48 single-serve containers and costs $10. What does each serving of juice cost?

    \text{Cost per serving} = \frac{10}{48 \text{ juice cups per case}} = 0.21 per cup/serving0.21 \text{ per cup/serving}

Order Guide

  • An order guide lists the product being sold, the size of the case with container size, and the price per case.
  • The Case/Quantity generally states:
    • The number of containers per case
    • The size of the container
    • Whether it is sold as a case
  • Examples of items in an order guide:
    • Apple juice: 48/ 4 oz /case (48 4-oz containers per case)
    • Bran muffins: 48/ 2 ¼ oz muf /case (48 muffins, each weighing 2 ¼ oz, per case)
    • Oatmeal: 12/ 42 oz /case (12 canisters of uncooked oatmeal, each weighing 42 oz, per case)
    • Ground beef 85/15: 2/ 5lb /case (2 chubs or containers of ground beef, each weighing 5lb, per case, totaling 10 lbs in the case)
    • Turkey breast, sknles, roasted: 2/ 8.5 lb average /case (2 turkey breast roasts, each with an average size of 8.5 lb average, per case, totaling 17 lb in the case)
    • Corn: 6 / No 10 cans /case (6 number 10 cans per case)
    • Oranges: 1/ 113 ct /case (1 case of oranges, containing 113 oranges total, per case)
    • Oreos: 120/ 4pk /case (120 packages of Oreos, each containing 4 Oreos, per case. The serving size is 4 Oreos, as that is how it is packaged)
    • Ketchup SS: 1000/ 9g /case (1000 single-serve packets of ketchup, each weighing 9g, per case)

Non-Single Serve Items

  • To find the number of servings per case for non-single serve items, information about individual serving sizes is needed.
  • Reference materials like "Food for Fifty" (Table 4.1) can provide this information.

AP and EP in Costing

  • Purchasing relates to AP (as purchased).
  • Calculations need to be in the same unit, including AP.

AP-Sized Serving

  • To determine the amount needed for one serving when the table gives information about how much food is needed to serve 50 (in AP), divide the Amount for 50 by 50.

  • Example:

    2 lbs AP oatmeal50 servings=0.04 lbs AP=23 oz AP-sized serving\frac{2 \text{ lbs AP oatmeal}}{50 \text{ servings}} = 0.04 \text{ lbs AP} = \frac{2}{3} \text{ oz AP-sized serving}

Finding the Number of Servings Per Case

  • Find the total amount in the case in the same unit as the serving, then divide by the AP-sized serving.

  • Example:

    • Oatmeal: 12/ 42 oz /case
    • Find the total amount in the case in the same unit as your serving, then divide by the AP-sized serving

    12∗42 oz=504 oz per case/23 oz AP serving=763.6 AP servings12 * 42 \text{ oz} = 504 \text{ oz per case} / \frac{2}{3} \text{ oz AP serving} = 763.6 \text{ AP servings}

Cost Per Serving

  • Use the number of servings per case to calculate the cost per serving.

  • Example:

    • Oatmeal: 12/ 42 oz /case, Case cost: $29.39

    \frac{$29.39}{763.6} = $0.04 \text{ per AP serving of oatmeal}

Summary of Calculations

  • Interpret an order guide for the number of single-serve items or total amount per case.
  • Calculate the cost per serving on a single serve item.
  • Calculate the AP-sized serving on non-single serve items.
  • Calculate the number of servings per case of these items.
  • Calculate the cost per serving of these items.

Example

  • Broccoli:

    • Case size: 4/ 3 lb /case
    • Case cost: $23.11

  • Find the AP-sized serving:

    (15+18 lb)2=16.5 lb AP\frac{(15+18 \text{ lb})}{2} = 16.5 \text{ lb AP}

    16.5 lb AP50=0.33 lb AP∗16=5.28 oz AP=514 oz AP\frac{16.5 \text{ lb AP}}{50} = 0.33 \text{ lb AP} * 16 = 5.28 \text{ oz AP} = 5 \frac{1}{4} \text{ oz AP}

  • Find price per serving:

    12 lb∗(16 ozlb)=192 oz AP per case12 \text{ lb} * (\frac{16 \text{ oz}}{ \text{lb}}) = 192 \text{ oz AP per case}

    192 oz AP per case5.28 oz AP per serve=36.36 servings per case\frac{192 \text{ oz AP per case}}{5.28 \text{ oz AP per serve}} = 36.36 \text{ servings per case}

    \frac{23.11}{36.36 \text{ servings}} = 0.64 per serving0.64 \text{ per serving}

Determining the Number of Cases for an Order

  • To determine how many cases are needed to order for a specific number of guests.

  • Calculating the amount needed using the AP amount for 50 is the same skill as scaling.

  • The assignment may ask for an order of food for 200 people. So the scaling factor is:

    200 servings50 servings=4 scaling factor\frac{200 \text{ servings}}{50 \text{ servings}} = 4 \text{ scaling factor}

Example: Oatmeal Breakfast for 1,000 People

  • Scaling factor:

    1,000 servings50 servings=20 scaling factor\frac{1,000 \text{ servings}}{50 \text{ servings}} = 20 \text{ scaling factor}

    2 lbs∗20=40 lbs AP oatmeal2 \text{ lbs} * 20 = 40 \text{ lbs AP oatmeal}

    12∗42 oz=504 oz per case12 * 42 \text{ oz} = 504 \text{ oz per case}

    40 lbs∗16 ozlb=640 oz/504 ozcase=1.27 cases=2 cases (rounding up)40 \text{ lbs} * \frac{16 \text{ oz}}{ \text{lb}} = 640 \text{ oz} / \frac{504 \text{ oz}}{ \text{case}} = 1.27 \text{ cases} = 2 \text{ cases (rounding up)}

Cost of the Cases Needed

Calculation:

40 lbs∗16 ozlb=640 oz/504 ozcase=1.27 cases=2 cases (rounding up)\frac{40 \text{ lbs} * 16 \text{ oz}}{ \text{lb}} = 640 \text{ oz} / \frac{504 \text{ oz}}{ \text{case}} = 1.27 \text{ cases} = 2 \text{ cases (rounding up)}

$29.39 per case * 2 cases = $58.78

Purchasing and Costing Assignment

Understanding Order Guides
  • An order guide is a listing of items that can be ordered from a vendor.
Calculations for Single-Serve Items
  • Calculating the price per serving on single-serve items requires dividing the total case price by the number of servings in the case.
  • To find the number of cases needed: 200 servings/48 servings per case = 4.1 cases = 5 cases to order (Always round cases up when purchasing)
Calculations for Items That Consider Percent Yield
  • Some items are packaged in single-serve amounts, many will need to have their number of portions per case calculated.
  • Examples: oatmeal and ground beef. Both are complicated because their yield changes during cooking, oatmeal expanding from the addition of water, and ground beef shrinking due to cooking off water and fat.
Determining the Number of Cases Needed to Order
  • Once we know the number of servings per case, we can calculate the number of cases needed for 200 servings.
    • Oatmeal: 200 servings needed/787.5 servings per case = 0.25 case = 1 case when rounding up
Putting it Together
  • Using what we have learned so far, fill out the following table of item. This will require you to recognize what calculations are needed for each food, similar to what you would do on a order.
Finding the Cost Per Day and the Cost Per Order
  • Lastly, we will use the information we have found above to determine the cost of food for the day. We will also determine the cost of our whole order.