Costing, Inventory, and Waste Control
Costing, inventory and waste control asks you to price a product from its actual formula, keep stock rotating, and explain where margin leaks.
Recipe costing
Cost each ingredient from the pack price divided by the usable weight, then multiply by the quantity in the formula. Edible yield matters: if trim loss is 8%, effective cost is price ÷ 0.92. Total the batch, divide by the number of saleable units, then add labour, overhead and packaging before setting price and margin.
Inventory
Use FIFO for dry goods and FEFO for perishables. Record deliveries, check temperatures, date-code everything, and set par levels from usage. Stock counts should reconcile against theoretical usage; a persistent gap means portion drift, theft or unrecorded waste.
Waste
Track waste by cause - overproduction, staleness, trim, error - because each cause has a different fix. Record it daily; a waste book that is never read is decoration.
Worked example
Butter costs €12.50 for a 5 kg block, so €2.50/kg. A croissant batch uses 680 g: 0.680 × 2.50 = €1.70. The batch yields 40 saleable croissants: €0.0425 each. If total batch cost including flour, yeast, sugar and labour is €9.00, that is €0.225 per croissant. At a €2.20 selling price the gross margin is about 90% before overhead - realistic only if waste is controlled.
Traps
Costing from pack price without applying yield; ignoring trim and unsold product; pricing from competitors instead of your own cost; and letting stock sit without date codes.