Skip to main content

How is Recipe Cost calculated?

Lee Grisham
Are the individual ingredient costs based on current costs or average cost from a period of time?   Thanks,
0

Comments

10 comments

Date Votes
  • Mark Whitmore

    Hi @Hudley Grisham​ ,

     

    Thank you for your question.

     

    The ingredient cost is explained in more detail in the article here:

     

    https://fc.force.com/customer/s/article/Purchasing-Inventory-Creating-a-Recipe

     

    But to summarise the cost of the ingredient will be the Inventory cost at your Property Storeroom. (which may include rates as it's Inventory Cost).

    If you don't have any quantity of the product at storeroom then Cost of Product will be from the Product Purchase Cost field. 

     

    I hope that helps

     

    Best

    Mark

    Fourth

    0
  • Mark Whitmore

    Hi @Hudley Grisham​ ,

     

    You are correct!

     

    How the Inventory cost is calculated​ is set in Property > Administration > Property Preferences > Inventory > Valuation Method

     

    Hope that helps

     

    Best

    Mark

    Fourth

    0
  • Mark Whitmore

    Hi @Hudley Grisham​ ,

     

    Thank you for your question.

     

    The ingredient cost is explained in more detail in the article here:

     

    https://fc.force.com/customer/s/article/Purchasing-Inventory-Creating-a-Recipe

     

    But to summarise the cost of the ingredient will be the Inventory cost at your Property Storeroom. (which may include rates as it's Inventory Cost).

    If you don't have any quantity of the product at storeroom then Cost of Product will be from the Product Purchase Cost field. 

     

    I hope that helps

     

    Best

    Mark

    Fourth

    0
  • Lee Grisham

    Thanks, @Mark Whitmore​. Is the Inventory Cost calculated based on an Average? I think that setting is somewhere in Administration if I am correct.

     

    0
  • Lee Grisham

    Thanks, @Mark Whitmore​. Is the Inventory Cost calculated based on an Average? I think that setting is somewhere in Administration if I am correct.

     

    0
  • Mark Whitmore

    Hi @Hudley Grisham​ ,

     

    You are correct!

     

    How the Inventory cost is calculated​ is set in Property > Administration > Property Preferences > Inventory > Valuation Method

     

    Hope that helps

     

    Best

    Mark

    Fourth

    0
  • Halima Duncan

    Hi @Mark Whitmore​, this is a helpful thread and I have a follow up question. It looks like the Product Purchase Cost field updates from last purchase cost, is this correct? Is the only way to update this field by manually entering a new cost into the Purchase Cost field on the Product Master?

     

    Our resort does not have a Storeroom, and there are products that may not be purchased for months at a time. When a recipe is created with a product from the database that hasn't been purchased in a while, it loads with average cost--which may be outdated if it is pulling from a 6-month old purchase price.

     

    What would be the best practice in this scenario? How could we ensure that our recipes are pulling current product costing?

     

    Thanks for your help!

     

    HD

     

    0
  • Halima Duncan

    Hi @Mark Whitmore​, this is a helpful thread and I have a follow up question. It looks like the Product Purchase Cost field updates from last purchase cost, is this correct? Is the only way to update this field by manually entering a new cost into the Purchase Cost field on the Product Master?

     

    Our resort does not have a Storeroom, and there are products that may not be purchased for months at a time. When a recipe is created with a product from the database that hasn't been purchased in a while, it loads with average cost--which may be outdated if it is pulling from a 6-month old purchase price.

     

    What would be the best practice in this scenario? How could we ensure that our recipes are pulling current product costing?

     

    Thanks for your help!

     

    HD

     

    0
  • Mark Whitmore

    Hi @Halima Duncan​ ,

     

    ​The Recipe Cost within a Recipe itself or static Reports, e.g. Recipe Summary Analysis, are simply for general reference & do not affect transactions. If current prices are required for menu modelling, then the individual Product Purchase Cost could be updated manually or once the Product is purchased, that field will be reflected automatically.

     

    Perhaps more relevant however, the transactional price is updated per the selling/preparing/transferring Outlet as discussed here:

    https://fc.force.com/customer/s/question/0D5D000005RL8lXKAT/does-menu-engineering-report-pull-historical-recipe-data-even-if-recipe-is-changed-after-menu-items-were-originally-sold

    Therefore, the absence of a Storeroom or an old general Purchase Cost will not have any impact on Recipe Sales/movement.

     

    Best

    Mark

    Fourth

    0
  • Mark Whitmore

    Hi @Halima Duncan​ ,

     

    ​The Recipe Cost within a Recipe itself or static Reports, e.g. Recipe Summary Analysis, are simply for general reference & do not affect transactions. If current prices are required for menu modelling, then the individual Product Purchase Cost could be updated manually or once the Product is purchased, that field will be reflected automatically.

     

    Perhaps more relevant however, the transactional price is updated per the selling/preparing/transferring Outlet as discussed here:

    https://fc.force.com/customer/s/question/0D5D000005RL8lXKAT/does-menu-engineering-report-pull-historical-recipe-data-even-if-recipe-is-changed-after-menu-items-were-originally-sold

    Therefore, the absence of a Storeroom or an old general Purchase Cost will not have any impact on Recipe Sales/movement.

     

    Best

    Mark

    Fourth

    0

Please sign in to leave a comment.

Didn't find what you were looking for?

New post