Menu Development, Planning, and Design: Costing and Profitability

This report provides a comprehensive analysis of menu development, planning, and design, focusing on cost analysis and profitability for the New London Cafe. It includes a detailed breakdown of menu costing for various items, calculating food cost percentages, contribution margins, and net income. The analysis extends to energy consumption, staffing costs, and profitability ratios, including break-even points. Key considerations for menu planning, such as business environmental policies, equipment limitations, and seasonality, are also discussed. The report concludes with a summary of findings and references relevant literature, offering valuable insights into effective menu management and financial strategies for the restaurant industry. The report is available on Desklib, a platform offering AI-based study tools and resources for students.

MENU
DEVELOPMENT,
PLANNING AND
DESIGN

TABLE OF CONTENT
 Introduction
 Menu costing
 Main revenue generating items
 Energy consumption
 Staffing cost
 Profitability analysis
 Ratio
 Break- even point
 Key consideration at time of menu planning

INTRODUCTION
 The current presentation is related with menu
planning and analyzing cost involved at time of
preparing menu.
 The current presentation is based on New London
café

MENU COSTING
MENU ITEMS Menu Price Portion Cost Food Cost %
Portion Contribution
Margin
Total Food
Sold Net Income
Total Food
Cost Popularity
Burger 21 5.46 26.00% 15.54 12 252 65.52 3.57%
Vegan cheese burger 25 5.12 20.48% 19.88 24 600 122.88 7.14%
Sandwich 16 6.18 38.63% 9.82 18 288 111.24 5.36%
Vegan sandwich 22 6.51 29.59% 15.49 38 836 247.38 11.31%
Fried Chicken 21 4.31 20.52% 16.69 12 252 51.72 3.57%
Clubhouse 13 2.1 16.15% 10.9 11 143 23.1 3.27%
Steak Sandwich 16 4.32 27.00% 11.68 8 128 34.56 2.38%
Cheese Quesadilla 14 5 35.71% 9 17 238 85 5.06%
Quesadilla with
Chicken 19 4.64 24.42% 14.36 18 342 83.52 5.36%
Reuben Sandwich 18 3.91 21.72% 14.09 24 432 93.84 7.14%
Turk ado 24 5.63 23.46% 18.37 49 1176 275.87 14.58%
Lasagna 13 5.8 44.62% 7.2 24 312 139.2 7.14%
Fish n Chips 20 5.31 26.55% 14.69 45 900 238.95 13.39%
Meatloaf 23 5.65 24.57% 17.35 36 828 203.4 10.71%

CONTINUED..
Food Cost percentage Total Food Cost / Total Sales 26.40%
Total Contribution Margin Total Sales - Total Food Cost 4950.82
Average Contribution
Margin/Customer Contribution margin / Quantity Sold 14.73
Contribution margin/ menu item Total Sales-Total Food Cost/Quantity Sold 14.73
Food Cost percentage Total Food Cost / Total Sales 26.40%
Total Contribution Margin Total Sales - Total Food Cost 4950.82
Average Contribution
Margin/Customer Contribution margin / Quantity Sold 14.73
Contribution margin/ menu item Total Sales-Total Food Cost/Quantity Sold 14.73

MAXIMUM GENERATING REVENUE
Maximum sold Items
Items Revenues
Vegan cheese burger 600
Vegan sandwich 836
Turk ado 1176
Fish n Chips 900
Meatloaf 828
Total 4340

USE OF ENERGY
Energy Cost
Heating 75.2
Lighting 51.6
Water 21.5
Insulation 43.5
Others 21.2
Total 213

STAFFING COST
Labor Cost
Chefs 324
Waiters 102.8
Workers 76.2
Total 503

PROFITABILITY ANALYSIS
Cost Statement Amount
Revenues 6727
Materials 1065.708
Labor cost 497.3304
Energy Cost 213.1416
Total 1776.18
Gross profit 4950.82
Fixed Cost 1200
Marketing 300
Profit 3450.82

COST TO PROFIT MARGIN
Cost to Profit Margin Ratio Sales – COGS / Sales
Cost to Profit Margin Ratio = 5955 – 1810
/ 5955
73.60%

BREAK- EVEN POINT
Break Even Point
BEP = Fixed Cost / Contribution
Margin
1630.52

KEY CONSIDERATION AT TIME OF
COSTING MENU
 Business environmental policies
 Scope and limitation of available equipment
 Seasonality restriction on menu cost calculation

CONLCUSION
 By summing above analysis, it has been summarized that by using effective
approaches, New London Cafe has set fix price of each dish which it desires to
offer people.
 Furthermore, by considering business environmental policies, seasonality
restrictions and scope & limitation of accessible equipment, menu planner has
costed and prices its menu appropriately.

REFERENCES
 Pell, D., and et.al, 2019. Support for, and perceived effectiveness of, the UK soft drinks
industry levy among UK adults: cross-sectional analysis of the International Food Policy
Study. BMJ open. 9(3). p.e026698.
 Pursey, K. M., Davis, C. and Burrows, T. L., 2017. Nutritional aspects of food
addiction. Current Addiction Reports. 4(2). pp.142-150.
 Ramos, C. L. and Schwan, R. F., 2017. Technological and nutritional aspects of
indigenous Latin America fermented foods. Current Opinion in Food Science. 13. pp.97-
102.