Recipe Costing Cards: The Oil Factor

food cost calculation recipe costing cards

Have you ever found yourself meticulously calculating your recipe costs, only to discover that your food cost is still higher than expected? If so, you might be missing a crucial ingredient in your recipe costing: fryer oil. Let me explain why incorporating fryer oil accurately into your recipe costing cards is essential for effective food cost management. 

Understanding the oil factor in recipe costing cards

You might be wondering why your actual food costs consistently exceed your projections, despite careful planning. Many restaurants overlook including fryer oil in their recipe costing cards, leading to discrepancies in food cost calculations and impacting the bottom line.

Think about it: you buy oil as food, you use fryer oil as food, yet if it's not included in your recipe costing cards, you're missing a significant cost component. So, how do you calculate oil usage accurately?

Calculating fryer oil usage

Start by determining your beginning inventory of fryer oil by its dollar value. Then, track all purchases of fryer oil during the period between two inventory counts. Subtract the ending inventory from the sum of beginning inventory and purchases to calculate the oil usage during that period.

Next, dive into your POS system and run a report to identify all fried items sold during the same period. Count the total quantity of fried items sold and divide it into the dollar amount of oil usage to determine the cost per unit of fried item.

Incorporating oil factor into recipe costing

Now that you have the cost per unit of fried item, it's time to incorporate it into your recipe costing cards. Create a vendor in your software for your restaurant and add "oil factor" as a product. Update the cost of the oil factor every time you run the oil usage calculation.

Include the oil factor as an ingredient in all recipe costing cards for fried items. This ensures that you accurately account for the cost of fryer oil in your food cost calculations and adjust your pricing accordingly.

Mastering your food cost isn't just about what's on the plate; it's about understanding every component, including fryer oil. By incorporating the oil factor into your recipe costing, you take a crucial step towards more accurate food cost calculations and ultimately achieving the financial freedom and prosperity you deserve as a restaurant owner.

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