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How To Do Costing

The document provides a 5-step process for determining the costing and pricing of food recipes: Step 1 involves writing down the recipe and ingredient quantities. Step 2 calculates the cost of each ingredient. Step 3 adds up total recipe costs. Step 4 divides total costs by the yield to find the cost per serving. Step 5 adds a markup, such as 130%, to determine the retail price per serving. Following this process helps set prices that cover costs and provide profits without compromising affordability.

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Jude Eduba
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1K views4 pages

How To Do Costing

The document provides a 5-step process for determining the costing and pricing of food recipes: Step 1 involves writing down the recipe and ingredient quantities. Step 2 calculates the cost of each ingredient. Step 3 adds up total recipe costs. Step 4 divides total costs by the yield to find the cost per serving. Step 5 adds a markup, such as 130%, to determine the retail price per serving. Following this process helps set prices that cover costs and provide profits without compromising affordability.

Uploaded by

Jude Eduba
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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HOW TO DO COSTING:

https://fitzvillafuerte.com/product-pricing-strategy-and-costing-template-for-food-recipes.html

One needs more than great tasting food, but likewise a good location, sensible marketing and
many other factors which also include reasonable pricing.

If you want to sell food, how do you determine your selling price? What is the right pricing
strategy so that you can give your consumers an affordable product with optimum profits?

Again, there are many factors to consider. But the most basic strategy is to come up with
the costing template for your recipes. From there, you can easily determine and adjust your
retail price that will fit your target market without compromising your income.

So how to you make a costing template for your food recipes? Here’s a five-step product pricing
plan.

Step 1
Write down your recipe, including all the ingredients and their quantities, as well as the average
yield. It helps to convert the quantity to measurable equivalents.

Step 2
Determine the price of each ingredient and calculate the cost per recipe. Simply divide the
ingredient price by the total volume and multiply it by the equivalent measure in your recipe.

Example:
375 ml of cooking oil costs P20. So P20 divided by 375 ml multiplied by 30 ml (from recipe)
equals P1.60

Step 3
Add up the total cost of the ingredients per recipe to determine the total recipe cost.
In our example, the total food recipe cost would be P17.86

Step 4
Divide the total recipe cost by the total yield to get the cost per serving.

Since our recipe example will yield 4 servings, then our cost per serving will be P17.86 divided
by 4 which is equal to P4.47

Step 5
Now add your mark-up to the cost per serving. If we’ll follow the simple pricing strategy I wrote
before, then this would be considered as a make-and-sell item that requires 130% profit margin.

So from our costing template example, one order of scrambled eggs in my food business would
cost P10.27 (or I can round it up to P10.50 ).

What is the basis of the 130% profit margin?

It’s just best practice as told to me by friends who are in the food cart business. They say that
the 100% covers for the production cost and the 30% is your product cost mark-up. I believe
that there’s really no economic basis for that figure.

And of course, this is just one of the many pricing strategies you can do. After all, there are still
other factors and business expenses to consider.
My Personal Costing & Steps

1. List all ingredients and create a table of cost per measurement

For Example

Item weight price per 1 1/2 1/4 1 Tbsp 1/2 1/4


grams( cup cup cup Tbsp Tbsp
100)

almond flour 1 kg

Coconut Flour 1kg

cheddar cheese 500


grms

sugar 1 kg

butter 1 cup/
225
grams

cream cheese 1 kg

ques-o 500
grams

cacao powder 1 kg

2.Add to the table your recipe matching the ingredients and cost used

Item weight price per 1 1/2 1/4 1 1/2 1/4 Chocolate


grams(100) cup cup cup Tbsp Tbsp Tbsp cupcakes

almond flour 1 kg

Coconut Flour 1kg

cheddar cheese 500


grms

sugar 1 kg

butter 1 cup/
225
grams

cream cheese 1 kg
ques-o 500
grams

cacao powder 1 kg

YIELD PER
RECIPE

PACKAGING CLAM
COST SHELL
P10

3. Divide PER yield to get the cost of the item


4. Multiply by 50% ? 75% ? 100%? 130% for your desired MARK-UP.

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