How to Make Menu Costing
HOW TO MAKE MENU COSTING
Menu Costing - is a preparation of beverage menu cost for every bar product to be sell. Make sure that all operating expenses and miscellaneous are included. The menu costing and selling price are the most important task to make a profits.
45 ml Tequila Silver 0.50
20 ml Triple Sec Liqueur 0.25
45 ml Lemon Juice 0.15
Total menu in cost price 1.00
Preparing menu or selling price:
Beverage Menu in cost price 1.00
Beverage Markup 20%
Marketing flow 25%
Given Percentage 100%
$1.00 X 20 X 25 / 100 = Selling Price
$1.00 X 20 = 20
20 X 25 = 500
500 / 100 = $5.00
Selling Price is $5.00
Gross Profit Margin Percentage
Summary: $5.00 - $1.00 = $4.00
Gross Profit: $4.00
Total Sales Revenue: $5.00
Gross Profit $4.00 Divided by Total Sales Revenue $5.00 = 0.80
Gross Profit percentage Computation 0.80 x 100 = 80%
Gross Profit Margin Percentage = 0.80%
Bar Cost Sample Tips;
Cocktail Cost / Selling Price = Bar Cost
$1.00 / $5.00 = 20%
Bar Cost is 20%
- When making cocktail menu, you must study location and adjust beverage mark up and marketing flow. Marketing flow is a percentage for low and high price of the product in the market.
- The standard markup of beverage is 19% to 25%, and marketing flow is defending against the feasibility study of your business, Given Percentage is a percentage of 100 percent to be used as calculation/ deviation to get your selling price in the right direction.
- You can use this formulas for actual bar operations; just adjust the best for your business selling prices.
- Direct percentage caculation of the selling price likes times 500% or more is not recommended, "because, you can't control the marketing flow of the market daily/weekly and monthly