Financial Calculations

mark up factor

100%/food cost %

percentage of occupancy

# of beds occupied/# of beds available

A restaurant serves banana cream pie. For the last 4 weeks the number of pieces of pie sold were 123 the 1st week, 152 the second week, 108 the 3rd week and 143 the 4th week. This week 110 pieces were sold. Using a 4 week moveable average technique, what is the forecast for next week?

152 + 108 + 143 + 110 = 513/4 = 128 Use the most current info... skip the first week

Determine the # of lbs. of uncooked oven ready leg of lamb that must be purchased to produce 48 4 oz. portions of roast lamb if the yield is 0.425?

48 x 4 = 192 oz = EP AP = EP/% YIELD 192 oz/16 = 12 lbs 12 lbs/0.425? ~29 lbs.

Dept budget = 500,000. Labor is 50%, food cost is 40%, all other expenses = 10%. What will the budget be for next year if labor expenses increase by 5%, food increases by 4% and all other expenses are expected to remain the same?

500k x .50 = 250k 500k x .40 = 200k 500k x .10 = 50k 250k x 0.05 = 12,500 200k x 0.04 = 8,000 50k = no increase 12,500 + 8,000 = 20,500. Next years budget = 520,500.

How many #10 cans are there in a case?

6

A restaurant selling hamburgers employs only 1 cook. During the peak lunch hour, he is able to produce 120 hamburgers an hour. During the slack afternoon period, he produces only 30 per hour. If each sells for 3.99 and the cook is payed 9.40 an hour, calculate labor cost per hamburger during each of the two time periods.

Labor cost/# of hamburgers 9.40/120 = 0.0783 per hamburger 9.40/30 = 0.3133 per hamburger

What is the net profit if sales are $95,000, gross profit is 46,500, labor costs are 27,000 and other operating expenses are 1500?

Net profit = gross profit - (labor cost +operating costs) 46500 - (27000 + 1500) = 18,000

Your cafeteria serves lunch between 11:30 and 1:30. Employees get a 30 minute break but spend only 20 minutes in the dining area. How many chairs are needed in the dining room to accommodate 250 staff members?

Open for 2 hrs Employees spend 1/3 hr in the dining room 250 people/2 hrs/3 = 42 chairs

Food cost (issued)

Opening inv + purchases - closing inv

The following numbers are from Nov. financial report: opening inventory = 1500, purchases = 4600, closing inventory = 1722. Determine total food issues.

Opening inv + purchases - closing inv 1500 + 4600 - 1722 = 4378

Inventory turnover

cost of goods sold/average inventory value

break even point

fixed cost/ (1-variable costs/sales)

actual cost

food cost + labor cost + other variable cost + fixed cost + profit (all of these can be obtained as a percentage of sales from the profit/loss statement)

Food productivity ratio

food cost per patient per day, or food cost per meal

food cost percent

food cost/sales

net profit/loss

gross profit - labor cost - operating cost

labor productivity ratio

labor cost per patient per day or labor cost per meal

labor cost percent

labor cost/sales

Total dollar sales divided by cost of a prototype meal will determine:

meal equivalent

return on assets

net profit/assets

return on equity

net profit/equity

profit margin

net profit/sales

prime cost

raw food cost + direct labor cost

menu price factor

raw food cost x mark up factor

gross profit/loss

sales - cost of goods sold

A prototype meal consists of:

the average cost salad, entree, side, bread, dessert and beverage

% yield

the factor used to determine how much of the food is lost as a result of the cooking, cutting, and processing of the food.

as purchased amount

the portion of food that is in the raw state before any cutting, processing, or cooking has occurred = EP / % yield.

edible portion

the portion of food that will be served to a customer after the food has been cut and cooked = AP x % yield.

labor minutes per meal

total labor minutes to produce meals/total number of meals served

meals per labor hour

total number of meals served/total labor hours to produce meals

Average sale

total sales/covers or number of guest checks

Initial out of pocket cost for ice cream machine = $8,000, estimated profits are $325 per month for May-Sept and $215 October-April. What is the payback period for this investment in capital equipment?

$325 x 5 = 1,625 $215 x 7 = 1,505 1,625 + 1,505 = 3,103 $8,000/3,103 = 2.6 years

Labor productivity factor is 0.75 hours/patient day. How many labor hours can be utilized today if the census is 158?

0.75 x 158 = 118.5

How many FTE's are needed to cover the following schedule: 2 FT cooks/day, 7 days per wk 1 FT salad prep/day, 7 days per wk 1 FT dessert cook/day, 5 days per wk 2 FT aides/day, 7 days per wk 2 PT aides/day, 7 days per wk

1 FTE = 40 hrs. Total the number of hours worked in 1 week and divide by 40. 5 FT people x 8 hrs/day x 7 days per week = 280 hrs. 1 FT person x 8 hrs/day x 5 days per week = 40 hrs. 2 PT people x 6 hrs per day x 7 days = 84 hrs. 280 + 40 + 84 = 404/40 = 10.1 FTEs

Compute the popularity index for a chicken sandwich given the following sales data: hamburger 60, chicken 20, roast beef 40.

20 + 60 + 40 = 120 items 20/120 = 16.6%

Your trayline has 6 stations can produce 275 trays in 1 hour and 15 minutes. What is the productivity of your tray line?

275/75 minutes = 3.6 trays per minute

Using the popularity index, how many chicken sandwiches will be sold if predicted sales are 300 items?

300 x 0.166 = 49.8

Compare the nutrient density of 1 cup of fat free milk (85 kcal 300 mg ca) to 1 1/2 cups fresh turnip greens (15 kcal, 100 mg calcium)

300/85 = 3.5 mg calcium per kcal in milk 100/15 = 6.7 mg calcium per kcal in turnip greens

How to tell scoop size equivalants in oz?

32/# of scoop size = oz

How many servings of tuna salad using a #12 scoop will you get from 2 gallons?

32/scoop # = oz 32/12 = 2.6 oz per scoop 1 gallon = 128 ounces 128 oz x 2 gallons = 256 oz/2.6 ounces = ~96 oz

If there are 87 covers with 737.76 total sales, what is the guest check average?

737.76/87 = $8.48

How many labor hours per day are needed to staff the tray line if census is 275?

75 minutes x 6 stations = 450 minutes 3 meals a day x 450 minutes = 1350 minutes/60 = 22.5 labor hours

In budgeting terms, the dietary department would be classified as

A cost center

Midtown deli is concerned about their bill paying capacity. They are conducting an acid test ratio. They have $34,156 dollars in cash and $7,278 dollars in accounts receivable and $38,000 in marketable securities. Their current liabilities are $61,175. What is the current ratio?

Acid test ratio = Cash + accounts receivable + marketable securities/current liabilities 34,156 + 7,278 + 38,000/61,175 = 1.298

If ground beef has an 80% yield, how many pounds of beef must be used in spaghetti sauce to ensure a 2 oz. portion for 50 people?

AP = EP/% yield 2 oz x 50 people = 100 oz that will be served to the customer (EP) 100 oz / 80% = AP 100 oz/.80 = 125 oz raw amount before any preparation (AP) 125 oz / 16 oz in a lb = 7.8125 lbs

If a 4 oz boneless portion of chicken breast is desired, how much would you purchase if the yield from 1 lb is .47 lb cooked deboned skinless?

AP = edible portion / % yield AP = 4/.47 = 8.5

Your restaurant closes at 8 pm. Recently, business has been getting better close to closing. You have determined that staying open an additional hour will cost $75 in labor hours and $12 in heat, lighting and gas. Variable food costs are 40% of sales. What additional sales are necessary to break even on the extra hour of opening?

BEP = fixed cost/ (1-variable costs/sales or contribution rate) 75 + 12/(1 - 0.40) = $145

What is the breakeven point if fixed costs are 48,337.80 and contribution rate is 0.6?

BEP = fixed cost/ (1-variable costs/sales or contribution rate) 48,337.80/0.6 = 80,563

Given the following data, what is the contribution margin? Fixed costs-28,000, variable costs-60,000. sales-100,000

BEP = fixed costs/(1-variable costs/sales) (1-60,000/100,000) = 0.4

Cost of Goods Sold (COGS)

Beginning inventory + purchases = cost of goods available - ending inventory

What is the COGS if inventory on April 1st was $27,456, inventory on April 30th was $20,556 and purchases totaled $23,890?

COGS = Beginning inventory + purchases = value of available food-ending inventory $27,456 + 23,890 = 51,346 - 20,556 = 30,790

Determine food cost per meal and labor cost per meal using the following data: food expenditures = 12,200 cafeteria sales = 6,360 labor expenses = 17,280 meal equivalent factor = 2.75 total patient meals = 2953

Cafe sales/meal equivalent factor 6360/2.75 = 2313 meals Patient meals + cafe meal = 5266 total meals 12,200/5266 = 2.32 17,280/5266 = 3.28

Acid test ratio

Cash + accounts receivable + marketable securities/ current liabilities

Current liquidity ratio

Current cost/current liabilities

Contribution Margin

Denominator of break even formula. Proportion of sales that can contribute to fixed costs and profits after variable costs are covered.

Seven 9 inch pies require 15 lbs fresh apples to be peeled and sliced. The apples have an 80% yield. It takes an employee making $7.25 an hour 2 hrs to peel and slice the apples. What is the EP cost of the apples if 1 lb AP is $1.49?

EP = AP x %yield EP = 15 x 0.80 EP = 12 lb apples 15 x 1.49 = 22.35 7.25 x 2 = 14.50 labor 36.85 = total cost for 12 lb edible apples 36.85/12 lb = $3.070/lb

What is the food cost percent in a restaurant if food costs are 564,898, beverage costs are 78,670 and sales are 2,567,560?

Food cost percent = food cost/sales 564,898/2,567,560 = 22%

Menu engineering focuses on popularity and profitability of menu items. In your restaurant: lobster pizza = 125 served, 0.95 per serving 5 cheese pizza = 185 served, 2.25 per serving fruit pizza = 15 served, 2.85 per serving You should...

Increase the price of the lobster pizza Prices should be raised on high demand-low profit items.

What is the inventory turnover rate for Jan-March if inventory value was $2,756 in Jan, 3750 in Feb and 1800 in march? The value of goods sold was 3756 in jan, 4250 in feb and 4560 in march.

Inventory turnover = cost of goods sold/average inventory value 3756+4250+4560/(2756+3750+1800)/3 = 4.539 This high ratio indicates that inventory has been used up quickly - good for financial management.

Given the following info, what is the inventory turnover: BI = 3278.40, closing inv = 3322.6, food cost = 13220.00

Inventory turnover rate = COGS/avg inv value 13220/(3278.40 + 3322.6/2) = 4

What is the markup factor and selling price of a ham sandwich if food cost percent is 40 and raw food cost is 0.90?

Mark up factor = 1/food cost percent 1/0.40 = 2.5 2.5 x 0.90 = 2.25

Nestor's restaurant uses periodic order method, placing orders every 2 weeks. Determine the quantity of canned peaches to order today if normal usage is 1 case of #10 cans per week, quantity on hand is 3 cans and desired ending inventory is 5 cans.

There are 6 #10 cans in a case. 6 cans per week x 2 week period = 12 cans 12 cans - 3 cans = 9 cans Still want 5 cans to be left 9+ 5 = 14 cans so 3 cases

Popularity index

Portions of item A/total portions for all menu items

3.2 fl oz - 1/4 cup

Scoop #10

8 fl oz - 1 cup

Scoop #4

4 fl oz - 1/2 cup

Scoop #8

What is the prime cost selling price for a serving of roast beef if food cost % = 40, labor cost % = 38, food cost for roast beef = 0.90 and labor cost for roast beef = 0.24?

Selling price = prime cost x pricing factor Prime cost = food cost + labor cost 0.90 + 0.24 = 1.14 Pricing factor = 100%/(fc% + lc%) 100%/ (40+38) = 100/78 = 1.28 1.14 x 1.28 = $1.4592

The cook followed a recipe to produce 300 servings of mashed potatoes. Trayline staff used a #8 scoop instead of a #10 that was indicated on the spreadsheet. Number of servings needed are 292. How many more portions should be made?

The correct recipe would have produced: 300 servings x 3.2 oz = 960 oz The incorrect recipe produced: 960 oz/4 oz per serving = 240 servings 292 needed servings - 240 servings = 52 still needed. 60 is the closest answer

T or F: EP cost will always be higher than the AP cost

True.

T or F: EP weight will always be less than the AP wt

True.