Do you think it is possible to get a truly accurate food or variable cost for menu items? What ...

Depending on how diligent or specific a costing exercise the organization wants to go with, most food and variable costs are only generally correct. True variable costs should include labor costs (which would require implementing a time motion study), allocation of utility costs (amount of gas and electric used). In addition, the timing between ingredient purchase and when ingredients are used may also misrepresent food costs. For example, par-stock ingredient items may be purchased in bulk and used over the course of a long period of time. If sugar was purchased at 2/lb in January, and prices go up to 3/lb later in the year, what ingredient cost should you use when you bake a cake in October?

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