formulation/docs/help/costing/purchase-items-and-costing.md

Purchase Items, Pack Sizes & Recipe Costing

Accurate recipe food costing relies on mapping real-world vendor purchase packages to canonical ingredients.

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1. Purchase Items & Pack Configurations

A Purchase Item represents a commercial package purchased from a vendor or distributor:

• Pack Size & Unit: e.g., 50 lb Bag, 6 x 1 Gallon Case, 16 oz Container.
• Cost: Total package purchase price (e.g. $24.50).
• Yield Factor (%): The usable portion percentage after trimming or prep (e.g. 85% usable yield on trimmed beef tenderloin, 100% on flour).
• Unit Cost: Automatically computed per base unit (e.g. $0.00108 / gram or $0.49 / lb).

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2. Recipe Food Costing Breakdown

When viewing a recipe's Cost tab:

1. Line Cost: Each ingredient's line item cost is calculated as: \text{Line Cost} = \frac{\text{Quantity} \times \text{Unit Cost}}{\text{Yield Factor}}
2. Total Batch Cost: The sum of all line item costs for the batch.
3. Cost per Serving: Total Batch Cost divided by total yield servings.
4. Food Cost % (Target Selling Price): \text{Suggested Price} = \frac{\text{Cost per Serving}}{\text{Target Food Cost \%}}