How do you compute standard portion cost and how can variances be used to control costs?

• A. Standard portion cost = actual cost of the entire recipe; actual cost variance = standard − actual cost; investigate variances to adjust purchasing, portioning, or selling price.
• B. Standard portion cost = portion size × unit cost.
• C. Standard portion cost = projected cost of a standard serving (portion size × unit cost); actual cost variance = actual portion cost − standard portion cost; investigate variances to adjust purchasing, portioning, or selling price.
• D. Standard portion cost = total food cost for the day; variance used to set monthly budgets.

Answer: (C)

The main idea is determining what each serving should cost and using that benchmark to control expenses. You first define a standard serving size and the cost per unit of each ingredient, then multiply them to get the standard portion cost. This reflects the projected cost for one portion, not the whole recipe.

For example, if the standard serving is 6 ounces and the ingredient costs $0.50 per ounce, the standard portion cost is 6 × 0.50 = $3.00. Track what it actually costs to plate that same portion. The variance is the difference between actual portion cost and the standard portion cost (actual − standard). If the actual cost comes out higher, you have an unfavorable variance that signals issues like price changes, waste, or portion drift. If the actual cost is lower, you have a favorable variance.

Use these variances to take concrete actions: adjust purchasing (seek better prices or substitutes), tighten portioning and yield control (calibrate scales, monitor trimming and waste, train staff), or adjust selling prices (menu pricing) to protect margins. This approach is effective because it ties daily costs to a fixed standard and guides targeted cost-control measures.