I have an interview soon and I really should know this but I have a real mental blockage, think iy has something to do with the cost of ingredients
2007-09-12 08:57:30 · 5 answers · asked by Martin M 2 in Business & Finance ➔ Other - Business & Finance
I'd just like to add to Steve B's excellent answer. Many businesses work on profit on sales, profit on return or profit on cost, and you need to know how to do these calculations. Taking Steve's advice, compute your actual cash profit on the meals you have sold.
1. Profit on sales (aka profit on return) is the cash profit times 100 divided by the selling price you got for the meals.
e.g., Total Cost £1.00, Sold at £3.00 = profit of £2.00
£2 x 100 / £3 = 66.67%.
Most businesses use this calculation, not the next one.
2. Profit on cost is the cash profit times 100 divided by the cost of producing the meals. Using the figures above,
£2 x 100 / £1 = 200%
It gives a bigger percentage but this calculation is not much used because the percentages often don't make sense..
Good luck at your interview!
2007-09-13 01:00:25 · answer #1 · answered by halifaxed 5 · 0⤊ 0⤋
Food Markup Calculator
2016-12-16 17:09:06 · answer #2 · answered by ? 4 · 0⤊ 0⤋
"something to do with the cost of ingredients" .. well, yes it might do ..
But in most Restaurants the MAIN costs are Staff and overheads (building rent, utility bills, insurance, local taxes ('rates') etc) .. in comparison, the actual cost of the raw food is minimal ..
One method to calculate 'mark up' on ingredients alone might be to add up all the non-food costs and subtract that from the price of the meals and then assume that what's left is the ingredients mark-up.
For example, if you sell bowl of chips at £2.50, £2.25 might be overhead, 15p cost of raw potato and hence mark-up 10p ...
2007-09-12 20:04:09 · answer #3 · answered by Steve B 7 · 0⤊ 0⤋
According to the Food Network shows, multiply by 3. That should give you enough money to pay wages, operating costs and a reasonable profit.
2016-03-13 03:57:43 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Profit margins vary from business to business - if you are in the fast food business, then margins will be tighter than in an upmarket restaurant.
It also depends on the opposition and what they charge, can you afford to be more or do you need to compete?
You still have to cover your overheads and charge enought to cover all the expenditure.
2007-09-12 09:49:45 · answer #5 · answered by Anonymous · 0⤊ 0⤋