Costing, menu engineering and production planning
Scope
This domain tests costing, menu engineering and production planning: how portion cost, selling price, mix and forecast drive profit and how to plan batches without overproduction.
Core rules
- Food cost % = food cost ÷ selling price × 100. Contribution margin = selling price − food cost.
- Menu engineering classifies items by popularity and contribution margin: stars (high/high), plowhorses (low margin/high popularity), puzzles (high margin/low popularity), dogs (low/low).
- Use EP cost, not AP cost. Include trim, cooking loss and waste.
- Production planning uses sales forecast, par levels, batch size, shelf-life and labour capacity.
- A low food cost % can still mean low total profit if volume or margin is low.
Worked example
Dish A sells 120 portions/week at €12.00; food cost €4.20. Contribution = €7.80; food cost % = 35%; weekly contribution = €936. Dish B sells 200 at €9.00 with €3.60 food cost: contribution €5.40; food cost 40%; weekly contribution = €1,080. B has a worse percentage but better total contribution. Promote B if capacity allows.
Traps
- Ranking menus by food cost % alone.
- Forgetting waste and over-portioning in cost.
- Forecasting from last week without seasonality or events.
- Producing to maximum batch size when shelf-life is short.