Pricing and Margin Calculations

CostGuard has a feature that crunchs important financial calculations for each recipe.  It calculates a suggested menu price based on your target percentages.  Use this information to quickly analyze the contributions of each recipe.  You can also use it to play “What If” scenarios such as changing the menu price, or changing the price of an ingredient.

This section appears for all types of recipes, but it is best used with a serving recipe.  If you want to change the formulas or the percentage used in this screen, go to Recipe Setup Options.  For more information on options, click here

You need to enter at least one of the following Fields

Current-Sells For: if this is a menu item, type in the sales price here.  You can also use the arrow to “spin the number up or down” a dollar at a time and see how it affects your final margin.

Food Cost % or Gross Margin %: Depending on which option you chose in Recipe Setup Options, this field calculates the actual percentage based on the portion cost and the sales price that you entered.  You can also play “What if” games by spinning the percentage, and watching the Current – Sells For field show the Menu price with the current cost and that percentage.

When you enter one of those fields, it will save when you close the recipe file.  If you are playing “what-if” make sure that you type in the original numbers before leaving.

CostGuard calculates these fields automatically.

Current Cost Field:  This is the portion cost of the ingredients for this recipe.  If this is a serving recipe, it will be the same as the portion cost in the previous section.  The overhead percentage is included in this field; if you would like more information, click here

Current  Margin $:  This is Selling Price minus Current Cost.

Target Sells For:  Based on the formula and percentage that you selected in Recipe Setup Options, this field calculates the target menu price for this item.

Target Food Cost % or Gross Margin %: This field repeats the percentage that you chose in the Recipe Setup Options menu.  If you have a Category for this Recipe and you created Target Food Cost % in the Recipe Setup, then CostGuard will use that percentage.  For more information on setting these percentages, click here

Target Margin Dollars: Subtract the Current Cost from the Target Sells for this result.  This shows you how much you would make if you sell the recipe for the target sells for.