Costing and Purchasing
What is tested
The purchasing cycle, specifications, receiving and storage, stock control, food-cost percentage, portion control and menu pricing.
Core rules
- Purchasing cycle: requisition, supplier selection, ordering, receiving, storing, issuing.
- A specification states quality, grade, size, packaging, delivery temperature and price.
- Receiving checks: quantity against order, quality, weight, temperature, date codes and invoice.
- Storage: dry store, cold room, freezer; FIFO and labelling; par stock and bin cards.
- Cost of food used = opening stock + purchases − closing stock.
- Food cost % = cost of food used ÷ food sales × 100.
- Standard recipes and portion control control cost; yield and trim loss affect edible portion.
- Break-even = fixed costs ÷ (selling price − variable cost per portion).
Worked example
Opening stock N$8 000, purchases N$22 000, closing stock N$6 000, food sales N$60 000. Cost used = 8 000 + 22 000 − 6 000 = N$24 000. Food cost % = 24 000 ÷ 60 000 × 100 = 40%. If the target is 35%, the operation is overspending by 5 percentage points: review portion size, waste, supplier prices or menu price. Reasoning: purchases alone ignore stock movement; closing stock must be deducted.
Traps
- Using purchases as the cost figure.
- Forgetting closing stock.
- Confusing mark-up with gross margin (mark-up is on cost; margin is on selling price).
- Ignoring trim and yield when costing a portion.