Calculating Costs (With Answers) Page 21
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28Analyze Program Costs
Activity
Record the total
daily revenue and
Total
Break-Even
break-even point
Daily Revenue
vs.
Point
from the previous
pages in the spaces
$
vs.
$
to the left.
If the break-even point is more than the total daily revenue, changes need to be
made to decrease costs and/or increase revenue.
Activity
Guidelines Percentages
Transfer the figures
from each expense in
A
B
Column C, page 15 to
Expenses
Guidelines (%)
Revenue
Column B of the chart
on the left. Use the
1. Food
42
current program
2. Paper Supplies
2
percent of revenue (B)
3. Labor
42
to analyze if each item
is close to the
4. Other Labor
1
guideline percentage
5. Equipment
2
(A). Accepted
6. Overhead
10
management practices
recommend costs
7. Miscellaneous
1
should fall within these
Total
100
percentages.
Refer to the next page for completed worksheet.
QUESTION:
Are any expenses higher than the suggested guidelines?
YES / NO
The Guidelines Percentages above represent average percentage of revenue for each
expense. In a USDA Food and Nutrition study, it is reported that “food and labor costs
accounted for 84 percent of full cost” of the Child Nutrition Program’s total costs. Food
cost in this study range from 38 to 42 percent while labor costs range from 42 to 46
*
percent.
*
School Lunch and Breakfast Cost Study, Summary of Findings, USDA, Food and Nutrition Service,
October, 1994.
Calculating Costs - 21
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