CALCULATE PRODUCTION INPUT AND OUTPUT.pptx
- 2. What is Solution? What are the composition of Solution?
- 3. COST OF PRODUCTION Refers to the total cost incurred by a business to produce a specific quantity of a product or offer a service. It relates to the different expenses that a firm faces in producing a good or service.
- 4. Production costs can include a variety of expenses, such as labor, raw materials, consumable manufacturing supplies, and general overhead. Production cost is important to the supply side of the market. Sellers base supply decisions on the cost of production. In that production cost generally increases as more of a good is production, the supply price also tends to rise with the quantity supplied.
- 6. How to Calculate the production of Inputs and Output
- 7. Steps in recording and documenting production input First, weigh all materials and ingredients needed. Second, make a necessary listing in your notebook of all the materials and ingredients used. It is important to note how much or how many. This is what we call recording or documentation. Third, follow the correct format in documenting and recording.
- 8. Actual Spoilage/Rejects Actual spoilage rejects and their corresponding percentage depends on the product to be made. Example, in mango jam, spoilage refers to the peel of mango and seeds; for spoilage refers to which are not included or are left during packing.
- 9. Another example is on pickled fish, spoilage is the skin of calamansi, garlic and the intestinal organ of fish. In smoked fish the reject is the intestinal organ. Lastly, in fermented fish and other fishery product, small seashell, small stone and seaweeds are the spoilage.
- 10. Actual Yields and Recoveries Yield refers to the number of finished products after computing for the production output and input.
- 11. For example, you may be preparing a recipe for carrot soup. The recipe requires 1 kg of carrots, which you purchase. However, once you have peeled them and removed the tops and tips, you may only have 800 grams of carrots left to use.
- 12. In order to do accurate costing, yield testing must be carried out on all ingredients and recipes. When looking at yields, you must always consider the losses and waste involved in preparation and cooking. There is always value that is attached to vegetable peel, meat and fish trim, and packaging like brines and syrups.
- 13. Any waste or loss has been paid for and is still money that has been spent. This cost must always be included in the menu price. All products must be measured and yield tested before costing a menu
- 14. Note: Sometimes, this “waste” can be used as a by-product. Bones from meat and fish can be turned into stocks. Trimmings from vegetables can be added to those stocks or, if there is enough, made into soup.
- 15. The procedure for testing yields 1. Record the original weight/volume of your item. This is your raw weight or as purchased (AP) weight. -Whole tenderloin – 2.5 kg 2. Process your product accordingly, measure and record the waste or trim weight. -Tenderloin fat, sinew, chain, etc. – 750g tenderloin trim
- 16. 3. Subtract the amount of trim weight from the AP weight and you will have what is referred to as your processed or edible product (EP) weight. The formula is: AP weight – waste = EP weight. -2500 g − 750 g = 1750 g processed tenderloin 4 Get your yield percentage by converting the edible product weight into a percentage. The formula is EP weight ÷ AP weight × 100 = yield %.
- 17. % Yield = 1750 2500 = 70% for the tenderloin
- 18. Yield percentage is important because it tells you several things: how much usable product you will have after processing; how much raw product to actually order; and the actual cost of the product per peso spent.
- 19. Using Yield to Calculate Food Costs Once you have your yield percentage, you can translate this information into monetary units. Considering the losses incurred from trimmings and waste, your actual cost for your processed ingredient has gone up from what you originally paid, which was your raw cost or AP cost. These calculations will provide you with your processed cost or EP cost.
- 20. Procedure for determining EP cost 1. Record the AP cost, what you paid for the item -Whole tenderloin – 340PhP/kg 2. Obtain your factor. This factor converts all your calculations into percentages. The formula is: 100 ÷ yield % = factor 100 ÷ 70 tenderloin = 1.42
- 21. 3. Once the factor has been determined, it is now an easy process to determine your EP cost. The formula is: factor × as purchased cost per (unit) = edible product cost per (unit)