Menu Development, Planning and Design - Costing, Sales Mix, and Profit Margin Analysis

This presentation discusses the importance of proper costing and pricing of a menu for a successful restaurant business. It covers key considerations such as equipment cost, seasonal products, and business environment policies. It also includes calculations for proportion of main components, sales mix, and profit margin analysis. Recommendations for improvement are provided.

Menu Development, Planning and
Design

Table of content
Introduction
Key consideration of costing menu
Calculating proportion of main component
Calculating sales mix
Main source of revenue from menu
Use of energy
Staffing cost
Cost to profit margin
Costing analysis
Recommendation
Conclusion

Introduction
For the restaurant to be successful it is very necessary that the business
undertakes proper costing and pricing of the menu.
The reason behind this fact is that the menu is that one which outlines the
food products offered by restaurant so it is necessary that it is priced
correctly.

Key consideration while costing menu
For Anatolia Grill Restaurant it is very necessary that the business cost
and price the menu in proper and effective manner.
hence, before finalizing the cost and price of menu it is essential for
Anatolia Grill Restaurant that they consider some of the key factors which
are as follows-
Cost and availability of equipment
Seasonal products
Price of competitor
Business environment policies

Continued..
Cost and availability of equipment
This is the most important factor which need to be considered at
time costing the menu.
The reason behind this fact is that equipment is very important
for producing the goods and services.
This is necessary for the reason that without the equipment the
dishes cannot be prepared properly.

Continued..
Seasonal products
This factor is also necessary to be evaluated in order to manage and maintain the menu and costing it.
This need to be considered by Anatolia Grill Restaurant at time of the costing the menu because in case
the seasonal ingredients are not available then this will affect the menu and profitability to a great extent.

Continued..
 Business environment policies
 Along with price of competitors, the business environment policy will also need to be
considered at time of costing and pricing the menu.
 This is because of the reason that there are many different policies which business and
government make relating to use of certain ingredients.

Calculating proportion of main component
and accompaniments in dish
MENU ITEMS Menu Price Portion Cost
Food
Cost
%
Portion Contribution
Margin
Total Food
Sold Net Income Total Food Cost Popularity
Plain Nachos 20 6.5
32.50
% 13.5 18 360 117 5.08%
Veggie Nachos 30 6
20.00
% 24 30 900 180 8.47%
Sweet potato and
coconut soup 31 6.2
20.00
% 24.8 28 868 173.6 7.91%
Roast Vegetable
Chili Burrito 36 6.25
17.36
% 29.75 31 1116 193.75 8.76%
Sweet Chili Totu
Sizzler 20 4.6
23.00
% 15.4 18 360 82.8 5.08%
American Veggie
Burger 25 2.6
10.40
% 22.4 20 500 52 5.65%
Mexican Veggie
burger 25 5
20.00
% 20 21 525 105 5.93%

Continued..
Legend veggie
burger 36 5.65 15.69% 30.35 35 1260 197.75 9.89%
Veggie Parmo 20 5.05 25.25% 14.95 19 380 95.95 5.37%
Pepper potatoes 25 4.05 16.20% 20.95 24 600 97.2 6.78%
Lasagna 33 6.8 20.61% 26.2 31 1023 210.8 8.76%
Carrot cake 15 6.3 42.00% 8.7 13 195 81.9 3.67%
Dark Chocolate
Forest Fruit cake 36 5.95 16.53% 30.05 32 1152 190.4 9.04%
Cinnamon And
Raisin pancakes 35 6.28 17.94% 28.72 34 1190 213.52 9.60%
Subtotal main
dishes 387 77.23 297.48% 22.13 354 10429 1991.67

Recipe card
Name of Dish
Legend veggie
burger
Preparation
Time 15 minutes
Total Cost 16.38 Cooking time 5 minutes
Portion Cost 2.7 Portion Size 100 g
Sales Price 13.00 Portion Nos 6
Items
Weight per
kg/l/ units
Cost per Kg/l/
units ($) Actual cost
French Bread 5.000 3 15
Finely Chopped vegetables 0.230 0.85 0.1955
Different spices 1.000 0.65 0.65
Mozzarella Cheese 0.950 0.2 0.19
Oil 0.55 0.55 0.3025
Natural flavoring 0.10 0.45 0.045
Total cost 16.38
Portion Cost 2.7
Name of Dish
Dark Chocolate
Forest Fruit cake
Preparation Time 25 minutes
Total Cost 12.25 Cooking time 10 minutes
Portion Cost 2.0 Portion Size 500 g
Sales Price 8.87 Portion Nos 6
Items
Weight per kg/l/
units
Cost per Kg/l/
units ($) Actual cost
All- purpose flour 2.000 2 4
White sugar 1.500 1.1 1.65
Unsweetened cocoa powder 0.700 1 0.7
Melted dark Chocolate 2.00 2 4
Baking soda 0.100 0.1 0.01
Milk 1.00 1 1
Different types of fruits 0.50 0.5 0.25
Whipping cream 1 0.6 0.6
Vanilla extract 0 0.35 0.035
Total cost 12.25

Calculating sales mix
 The sales mix is being defined as the proportion of
different products to be sold for generating the
maximum revenue.
 This is very necessary for the reason that proper sale
mix is being used by Anatolia Grill Restaurant in order
to improve the profitability and productivity of the
restaurant.

Main sources of revenue from menu
 Within the menu there are many different types
dishes and from that as well there are some dished
which provides maximum profit.
 Hence, these are the particulars which provides for
maximum of the revenue from the total profit.
 Thus, the below are the dishes which involves the
maximum earning profit from the total profit.
Maximum sold Items
Items Revenues
Legend veggie burger 1260
Roast Vegetable Chili Burrito 1116
Lasagna 1023
Dark Chocolate Forest Fruit cake 1152
Cinnamon And Raisin pancakes 1190
Total 5741
55.05%

Use of energy for sustainable food
production
 Energy refers to as the resources which is essential
to run the machines and equipment in order to
process the food.
 Hence without the use of energy the work cannot be
accomplished by Anatolia Grill Restaurant.
Energy Cost
Heating 123.48
Lighting 95.60
Water 59.75
Insulation 83.65
Others 35.85
Total 398.33

Staffing cost
 Without the employees or staff no work can be
performed in better and effective way.
 Hence, for earning good amount of profit and to
maintain sustainability there is requirement of
qualified and skilled staff in Anatolia Grill
Restaurant.
 Hence, the total staffing cost levied by Anatolia Grill
Restaurant is 597.50
Labor Cost
Chefs 364.48
Waiters 113.53
Workers 119.50
Total 597.50

Cost to profit margin ratio
 The company operates with the sole objective
of earning profit and in case company is not
having good profitability then its efficiency
will be affected. Hence, in order to evaluate
the profitability, the cost to profit margin is
calculated.
 The break- even is being defined as the level
of production wherein the company is in no
profit no loss situation.
Cost to
Profit
Margin
Ratio Sales – COGS / Sales
Cost to Profit Margin Ratio = 7481 – 1634.55 / 7481
80.90%
Break
Even Point
BEP = Fixed Cost / Contribution Margin
1545.07

Costing analysis
Ratio Formula Amount
Food Cost percentage Total Food Cost / Total Sales 19.10%
Total Contribution Margin Total Sales - Total Food Cost 8437.33
Average Contribution
Margin/Customer
Contribution margin /
Quantity Sold 23.83
Contribution margin/ menu
item
Total Sales-Total Food
Cost/Quantity Sold 23.83
Cost Statement Amount
Revenues 10429
Materials 995.835
Labor cost 597.501
Energy Cost 398.334
Total 1991.67
Gross profit 8437.33
Fixed Cost 1250
Marketing 450
Profit 6737.33

Recommendation
 With the above calculation it is clear that the menu set is good but there are some of the
areas in which company need to work and improve the same. Hence, some of the
recommendation for Anatolia Grill Restaurant are as follows-
 The company need to improve the Carrot cake and this is necessary because this dish falls
in the category of Dog.

Conclusion
The above presentation concluded that for the restaurant the use of costing and pricing of
menu is very important.
Further it was inferred that the profit margin is around 80% and this is good for the business
and its working.

References
 Irie, K., and et.al., 2020, August. A Study on Menu Planning Method for Managed Meal-
Consideration of the Cost of Ordering Ingredients. In IFIP International Conference on Advances in
Production Management Systems (pp. 679-685). Springer, Cham.
 Watanabe, R., and et.al., 2021, September. A Study on Menu Planning Method Considering the
Variation in Menu Orders-Application to Daily Foods in a Company Cafeteria. In IFIP International
Conference on Advances in Production Management Systems (pp. 224-231). Springer, Cham.
 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.