Menu Costing and Pricing: Key Considerations and Approaches

This presentation discusses the key considerations and approaches for costing and pricing menus, including the impact of costs and revenue, available equipment, seasonality restrictions, and staffing costs. It also covers the four major approaches to menu costing and pricing, such as pricing by portion cost, competition, demand analysis, and raw food cost of item. Additionally, it provides an in-depth plan for menu development, including KPIs to measure success and recommendations for business objectives.

Menu Development, Planning and Design

TASK B
Key considerations which need to be taken into account when costing and pricing
menus
 Key considerations which needs to be taken into account when pricing and
costing the menus are -
 The impact of costs and revenue are from various sources in menu and dishes planning
which includes — revenue figures, energy costs, staffing costs and costs-to-profit-
ratios.
 The limitation and scope of available equipment in relation to costs.
 There is also an impact of seasonality restrictions as menu cost calculations.
 There is limitation and scope of available equipment which is in relation to cost
(Reeves and et.al., 2021).

These are some basic key considerations which needs to be taken into account for the
accounting and costing and while pricing the menus. There are certain monthly operating
costs which are being mentioned at large scale and in appropriate manner. This includes
labour costs, food costs, insurance, marketing cost etc. There are also some miscellaneous
expenses which are beverage costs etc. There are some restaurant revenues which are taken
into account at large scale. The revenue figures helps in addressing how much money The
Wilton Way Cafe generates. The costing includes gift cards, customer packages goods,
sales of beverage, orders which are taken online.

Along with this, there are energy costs which is also included while costing the
menu. There are some utility bills which are to be paid by The Wilton Way Cafe. The
utility bills include heating, lightning, water, insulation and others. There is staffing cost
which is also to be concluded at large scale. The labour cost helps in knowing that how
much the staff costs are so that the essential aspects of menu planning and its framing is
considered. The labour costs for The Wilton Way Cafe includes overtime and bonus, health
care and payroll taxes, labour cost, sick days etc (Reeves and et.al., 2021). Labour costs
and the staffing costs are the highest costs while owing the cafe. These are some basic
considerations which are included in the costing and planning of menu in an effective and
efficient manner.

Producing accurately costed and pricing menus to meet a range of customer
requirements

Food Cost percentage Total Food Cost / Total Sales 87.32%
Total Contribution Margin Total Sales - Total Food Cost 111.21
Average Contribution Margin/Customer Contribution margin / Quantity Sold 0.78
Contribution margin/ menu item Total Sales-Total Food Cost/Quantity Sold 0.78
Items Revenues
Steak and Kidney Pie 45
Chips and Fish 84
Bacon 336
Mushrooms 136
Bubble and Squeak 48
Total 649
74.00%

Cost Statement Amount Labour Cost
Revenues 877 Chefs 301.6
Materials 993 Waiters 92.8
Labor cost 463.4 Workers 69.6
Energy Cost 198.6 Total 464
Total 1655 1.887115165
Energy Cost
Gross profit -778 Heating 69.3
Lighting 49.5
Fixed Cost 800 Water 19.8
Marketing 150 Insulation 39.6
Profit -1728 Others 19.8
Total 198

Cost to Profit
Margin Ratio Sales – COGS / Sales
4910 – 1655 / 4910
66.29%
Break Even Point
BEP = Fixed Cost / Contribution Margin
1206.76

Analysing approaches to menu costing and pricing and using effective methods to
accurately cost and price menus to maximize profitability
There are major four approaches of the menu costing and pricing so that its helps in
maximizing the profitability of The Wilton Way Cafe. The approaches for menu costing
and pricing is described as follows — pricing by portion cost, pricing by competition,
pricing by demand analysis, pricing by raw food cost of item. These are some basic and
major approaches which are taken into consideration while planning the menu for The
Wilton Way Cafe (Nurfaridah and et.al., 2022). With the help of menu pricing and costing
the food items which are being added, there are certain aspects which are to be considered
in calculating the items so that maximum profitability is obtained while growing the
business in expanded and diverse forms.

With the help of pricing and costing, the items are signified and placed in the menu so that
the customers needs and preferences are fulfilled in the manner such that all major items
are being placed in the menu along with their prices mentioned. The pricing by demand
analysis and food cost of items are displayed in the manner such that the costs of food item
is analysed and evaluated within the menu of The Wilton Way Cafe.

Produce in — depth plan for menu development, including KPI to measure
success, produce and test menu along with recommendations for business
objectives of organization
An in — depth plan was being taken into consideration and this helped in knowing that
how effectively the menu plan was being made.
Key Performance Indicators (KPI) helped in measuring the scales as to how
effectively the menu is being planned and tested by assuring that the kitchen and
management KPI, people and profitability KPI, social media and marketing KPI were
being taken into consideration and items were added in the menu as per the scales of
testing and evaluating the positive measures of KPI. This helped in measuring success of
the items which were added in The Wilton Way Cafe (Nurfaridah and et.al., 2022).

The key business recommendations helped in knowing and understanding that
there should be certain strategies to be framed so that they help in knowing that the
business objectives are achieved along with the fulfilment of customer needs and
requirements. The business objectives of The Wilton Way Cafe are analysed and evaluated
for denoting the aspects as to what are the effective changes and modifications required at
large scale and in appropriate manner skilfully.

REFERENCES
Books and journals
Nurfaridah, E. and et.al., 2022. THE DEVELOPMENT OF PARENTING MODULE"
PLAYING MENU WITH PARENT" TO IMPROVE CHILDREN’S PROSOCIAL
BEHAVIOUR. Journal Of Educational Experts (JEE). 4(2). pp.56-61.
Reeves, P. and et.al., 2021. Economic evaluation of a web-based menu planning
intervention to improve childcare service adherence with dietary guidelines.
Implementation Science. 16(1), pp.1-12.