Transcript Calculating the True Cost of a Meal

Linda Netterville, MA, RD, LD
Contractor, Nutrition Program, DADS
Identify why it is important to know the
meal cost
 Identify the key components of meal
costing.
 Identify steps to keep meal cost within
the budget.
 Clarify audience questions and wrap-up

Why is it important?
What are the key components
of meal costing?
How can you control meal
costs?
Cost = price paid to acquire, produce,
accomplish or maintain anything
 Price = the sum in money or goods for
which anything is or may be bought or
sold
 Rate = a fixed charge per unit of quantity


Expenditure = Outlays/payments made by
the SUA and/or AAA’s using OAA federal
funds to provide an allowable service

Total Service Expenditure = OAA
expenditures plus all other funds
administered by the SUA and/or AAA’s on
behalf of elderly individuals and caregivers
for services meeting the definition of OAA
services
Program Operations
Program Accountability
Program Sustainability
Older Americans Act
Title III (C1, C2, NSIP),
V, VI
 Other Federal
Social services or
community service
block grants
 State-Vary by Sate

Competition for
limited dollars
› Grants
› Fundraising
Decline in client
contributions
Competition with for
profit companies

Meet the demand for meals
 Maintain quality
 Manage costs against revenues

 Demonstrates
impact of program to
funders
 Performance measurement
 Demonstrates efficiency
 Demonstrates effectiveness
Optimizes costs relative to revenue
 Potential to provide meals and services
for additional revenue
 Understand bid prices if purchasing
meals from a caterer

Social
Entrepreneurship
• Catering
• Expanded
Nutrition
Services
• Other
Programs-USDA
Child Nutrition
• For Pay Options
Long Term Care
Services and
Support (LTSS)
• Transition Care
• Managed Care
Food/Supplies
Equipment
Personnel
Occupancy/Fixed Costs
Transportation/Travel
Administrative/General

To find the food cost per meal:
Beginning Inventory
+Purchases (from invoices)________
=Total Food Available for the Period
- Ending Inventory__________________
=Raw Food Cost
To find the raw food cost per meal:
Raw Food Cost  Number of Meals Served=
Raw Food Cost per Meal
Group Activity
Worksheet Activity #1
Employee
Person A
Person B
Person C
Total
Wage Rate
Hours Total Salary Tax Match
Benefit
Total
Worked or Wages
(SSI &
Contribution Monthly
Medicare)
Labor Cost
N/A
N/A
$1,200.00
$91.80
$350.00
$1641.80
$12.00
40
$480.00
$36.72
$200.00
$716.72
$8.00
18
$144.00
$11.02
N/A
$155.02
N/A
N/A
$1,824.00
$139.54
$550.00
$2,513.54
18
Group Activity
Worksheet Activity #2
Menu Planning
Purchasing/Storage
Food Preparation/Service
Labor
Compare Actual Costs to Budget
Utilize a cycle menu
 Cook from scratch vs. convenience
 Food availability
 Consider season variations
 Buy food of the quality most suitable
 Consider the cost of labor
 Consider the equipment
 Consider the service container


Purchasing
›
›
›
›
›
Compare price and quality
Purchase according to the menu
Consider what is on hand
Consider delivery and storage
Buying methods




Open Market
Sealed or Fixed Bid
Cost-Plus
Co-op/Group Purchasing
Food on hand represents $$$
 Check all deliveries for:

› Pricing
› Quantity
› Quality

Maintain proper storage:
› Dry
› Refrigerated
› Frozen

Rotate stock

Standardized Recipes
› Consistent quality
› Predictable yield
› Customer satisfaction
› Consistent nutrient content
› Food cost control
› Efficient purchasing
› Labor control

Maintain proper temperatures of food
› Cold food below 410
› Hot food above 1350
Accurate forecasting and preparation
 Portion control

Efficient scheduling
 Availability of volunteers
 Labor should be in relationship to the
amount of work

› Meals per man hour
 Poor
menu planning
 Careless purchasing and receiving
practices
 Failure to use standardized recipes
 Inaccurate forecasting
 Careless food storage
 Waste in food preparation
 Portion control not followed
27

Monitor expenditures/revenues on a
regular basis
 Analysis of cost/meal
 Raw food cost per meal
 Total cost per meal
Identify areas under or over budget
 Take action to control

Group Activity
Worksheet Activity #3