COSTING OF BEVERAGES
Costing of beverages
Beverage cost calculations
The calculation of beverage cost and beverage cost percentage is exactly the same as that of food cost.
First, you need to compute the inventory amounts, calculate the cost of beverage sold, and then divide
the cost by the total sales money to obtain the percentage.
What should be included in beverage cost?
Beverage costs only include alcoholic beverages, such as liquor, beer, and wine since taxes need
to be paid by the establishments to the government. Iced tea, soft drinks, milk, and coffee, although
they are beverages, are considered food items and they are not taxable. The markup and pricing of
beverages are always higher than food. Beverage cost percentages run in the 15% to 25% range. They might be higher if a restaurant is running a special at a lower price or trying to sell inventory.
Basic terms in the calculation of beverage costs are:
1. Beverage cost This refers to the cost of all beverages incurred in preparing the served drink.
2. Beverage cost percentage This is the cost of beverages sold expressed as a percentage of sales of the beverage.
3. Beverage gross profit This is the excess of sales over the cost of the beverage expressed as a percentage or in financial terms.
4.
How to Calculate the Cost of Straight Drinks
Method 1
1. Total number of ounces in bottle ÷ Standard portion size (ounces) = Number of drinks per bottle
2. Cost of bottle ÷ Result from Step 1 = Standard drink cost
Method 2
1. Cost of bottle ÷ Total number of ounces in bottle = Cost per ounce
2. Result from Step 1 × Standard portion size = Standard drink cost
Adjustments to Beverage Cost
Added to beverage cost
Food to bar (directs)
Storeroom issues
Mixers
Subtracted from beverage cost
Managers’ drinks
Special promotions
How to Calculate Bottle Sales Values
1. Determine bottle size and drink size.
2. Calculate drinks per bottle.
3. Multiply drinks per bottle by drink price to get sales value per bottle
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