MODULE – 11

FOOD & BEVERAGE

BEVERAGES

COSTING

Beverages Costing

BASE OF COSTING

❖Costing of Food & Beverages are based on the Unit ofSales. i.e. cost per portion or measure of a unit. Then the unitcost is used to calculate to work out the selling price accordingto the profit margin required by the organization.

❖ Beverages are purchased either by the Bulk or Bottles orCases or in cartons. Then the costing is done in two waysi.e. one is for bottles and the other one is for cartons.

❖ When costing first to establish the Unit Price of Weight orthe Measure. Then on the base of the Gross Profit Margin ,Selling Price has to be calculated.

❖Cost is calculated by simply adding up the Cost of the Productused and dividing it by the Cost of the Product Sold. Forexample, if a Bar depleted $5,000 of Liquor in January andhad Liquor Sales in January of $25,000 their Liquor pour costfor January would be 20% ($5,000 ÷ $25,000

Base of costing

Gross Profit Margin

Beverage has a Cost of 20 to 25 Percent which results in a

“Gross Profit Margin” of 75 to 80 Percent. In addition to the

overall Cost of Food and Beverage, Restaurant & Hotel owners

calculate the Cost of each Dish.

Beverage costing

• Example:

Purchased price of a Bottle of Whiskey - Rs. 4500

Expected Gross Profit Margin - 65%

Cost Percentage - 35%

Calculation of Selling Price - 4500 x 100

35

= Rs 12857.00

Beverage costing

Various gross profit margins

• Draught Beer - 45%

• Bottled Beer - 50%

• Wines - 55%

• Spirits & Liqueurs - 65%

• Soft Drinks - 65%

❖Tea & Coffee - Costing is done according to the no: of sachets of Tea, Sugar & Milk or Cream used to prepare a Cup of Tea or Coffee.

❖Juices - Costing is done according to the no: of Fruits used to prepare a Glass of Juice.

This is where the Beverage Cost transferred to Food Cost

Costing of tea & coffee and juices

❖When costing a Mixed Drink or a Cocktail , it is compulsory to use a document called “STANDARD RECIPE’”.

❖In this document there are very important information's are indicated for the costing purposes.

These are as follows;Name of the Item Costed byTotal Volume Date CostedCost of Total Volume Date Re-costedUnit of Measure No of measuresCost of a Measure UnitUnit Price IngredientsQuantity Cost

Costing of mixed drinks or cocktails

A Standardized Recipe Format

specifically describes the Exact,

Measurable amount of Ingredients

and the method of preparation

needed to consistently produce a

High-quality Product. The exact

procedures, the type of

equipment, and the “Quantity &

Quality” of Ingredients are

listed.

Standard recipe format

Name of the Item -Costed By -Total Volume -Date Costed -Cost of Total Volume -Date Recosted -Unit of Measure -No of Measures -Cost of a Measure -

Ingredients Unit Unit Price Quantity Cost

Cost of Total Volume

=

1 2 3 4 5

Standard recipe format

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No: 287/2C Stanly Thilakarathne Mawatha, Jubilee Post, Nugegoda0112814500