What are the factors that influence both the Actual Food Cost and the Theoretical Food Cost?

Frank Hayward's picture

To answer this question, one needs to first understand the difference between actual food costs and theoretical food costs.

The actual food cost is calculated as the opening stock value plus the purchases value plus movement of stock into or out of the location less the closing food cost value.

The theoretical food cost is calulated by taking the sales of each menu item and multiplying it's recipe by the unit cost of each recipe item.

Factors Influencing Actual Food Cost:

  • Incorrect opening stock take
  • Incorrect closing stock take
  • Incorrect purchases
  • Incorrect manufacturing of stock
  • Incorrect stock transfers
  • Incorrect portioning
  • Not ringing up sales
  • Short deliveries
  • Incorrect stock returns
  • Theft of stock

Factors influencing Theoretical Food Cost:

  • Recipes
  • Incorrect ringing up of sales
  • Sales mix

Factors influencing Both the Theoretical and the Actual Food Cost:

  • Incorrect unit prices caused by mistakes with purchases. Having a stock item called potatoes with a unit price of R100 instead of R10 will cause the opening stock, closing stock and theoretical menu item cost of sales to all be incorrect. This makes incorrect unit prices the single biggest cause of mistakes on the GP report.
  • Incorrect wastage percentages will also cause both figures to be incorrect. If a stock item has a wastage percentage, always GRV the bulk quantity. Always count stock using the Bulk and Prepped columns correctly. Always manufacture stock using the bulk quantity.








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