Baking Basics

Baking
Basics

Business Tips

Business
Tips

Baking Glossary

Baking
Glossary

Business Tips

How to Cost a Recipe

Trying to cost a recipe? Many home bakers struggle with this. You don’t want to be too pricey and have people turning away or under cost and end up not making enough profit. That’s why we’ve put together some basic steps to help you cost your recipes just right! It is also worth looking at your competitors pricing to see how yours compare. This will give you an idea of what customers are happy to pay.

  • List all the ingredients in the recipe and add the real cost price for each ingredient.
  • Work out the cost per kg on every ingredient.
  • Write down how many grams you use of each ingredient.
  • Times the cost per kg by the amount used in the recipe. (This will give you the total cost per ingredient).
  • Add the total costs of each ingredient to work out the total recipe/batch cost.
  • Add the total amount used for every ingredient to get the total batch weight.
  • Divide the scaling weight (e.g. 500 g) into the total batch weight to calculate the recipe yield.
  • Divide the yield by the total batch cost to get a cost per product.
Example of a Costing:

Example of a Costing
Scaling weight: 500 g
Yield: (80.000/500) = 160
Cost per loaf: (172.35/160) = R 1.08
Selling per loaf: R 4.50
Gross profit: 76%
 
Basic Steps in Calculating the Selling Price:

For example, cost price of R 1.67
Required GP% of 60%


Equation

Equation

Please note: This example of costing excludes utilities and VAT.