Food Cost

Ok I'm working on food cost I do this weekly and I do it off of what I order. I don't do a complete inventory. so lets say it is the end of week one and I place an food order do I put the cost of that order on week one or do I put it for week 2. I mean the order is to replace food used in week one so that I have enough inventory for week 2. So lets make this easy lets say I sale hot dogs and nothing else. I keep on hand 100 hot dogs now then in week one I sale 50 hot dogs so on friday I order 50 more so that I have 100 for the coming week. Where do I place the cost of the hot dogs? On week or week 2?????

Hi Mike, usage is usage, the product either comes off the truck or out of inventory. lets say you bought $500 to replace food used to make $2000 in sales. Your food cost is 25%.............is that what your asking........Bill

week 1

What you lose has to be a factor in food cost and will help in inventory. Are you factoring in loss? Buy 100 sell 100 is nice. Buy 100 sell 72 lose 28 changes food cost  inventory schedule etc.
 
A good set of question in the hot dog section (for the hot dog vendors) would be how many they lose on average in a day or week...how do they modify the process to reduce loss...has it had any effect on the purchasing schedule/total...are they losing less now vs. when they started...what have their numbers told them.

Ok thanks for all of the help just to clear things up I don't sale hot dogs I was just using that as an example. I think I got the answer witch is week 1. But just in-case let me re-ask. in week one I sale what ever so at the end of week one when I do my food order so i have inventory for week 2 lets say in week one i sold $1000.00 and at the end of that week I order $100.00 of food so I have inventory for week 2 then my food cost for week 1 would be 10% yes??? And then at the end of week 2 I would use the $amount I spend for week 3' inventory on week 2 for my cost?

Usage is usage. An on-going and fluid process. If you purchase on a weekly basis it is best to isolate the numbers that way. Ordered A sold B lost C have D left. B & C are  sold/loss. You can adjust A for the following week according to D. If you try to factor  week one order and you happen to have placed a very big order you can be in week three with week one hot dogs. That does not mean you are still making or losing week one money.

Ok thanks alot eveyone

The purpose of doing the inventory to help calculate food cost is so that you know how much you spent on the food that you sold.  You count the money on the shelf as money in the bank.  So what you are spending on the invoiced food coming in from your orders does not really factor into your weekly food cost except to give you a cost per unit to use in your calculations.