How to cost dinner.

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 The Gourmet Night

You have decided to branch out and offer a gourmet dinner for 4 of your guests.  You know a good local chef who will prepare the meal for you for a total of $200 ie. $50 per head.  He asks you to purchase the raw food ingredients from a reputable supplier and these cost $25 per head.  You look at the figures from your profit and loss statement, prepared by your accountant and you estimate overheads at $30 per head.  What Selling Price (S.P.) should you charge guests per person to make a net profit of 20%?

Hint:  Look down at the columns from the previous entry for costing breakfast and substitute what you know into the following equation:

S. P.  =  Raw Food Cost  +  Labour  +  Overheads  +  Net Profit

100%    =     $25           +      $50    +        $30      +       20%

Think Back to School:  When you take a term across to the other side of the equation the sign changes, in this case 20% goes from a positive to a negative.

Gather like terms together i.e. %’s and $’s:

       100% - 20%  =  $105

                 80%     =  $105

                   

              100%    =  105    x 100

                                80          1

    Selling Price     =  $131.25 per person

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