MODULE 2
FOOD COSTING AND PRICING
Prepared by:
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
LESSON 1
BASIC BUSINESS MATH PRINCIPLES
IN FOOD COSTING AND PRICING
Prepared by:
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
1.1.Rounding Off Numbers
At the end of the lesson, the students
should be able to:
1. Apply the knowledge of place
values in rounding off numbers;
2. Round of decimals and whole
numbers;
3. Apply rounding off numbers I
problem solving.
1.3 Rounding Off Numbers
At the end of the lesson, the students should
be able to:
1. Understand the concept of decimals;
2. Convert decimals to fractions and
fractions to decimals..
1.4 Rounding Off Numbers
1.2 Fractions
At the end of the lesson, the students should
be able to:
1. Identify the different types of fractions;
2. Simplify fractions;
3. Perform the fundamental operation with
fractions.
Prof. Rowena R. De Leon
At the end of the lesson, the students should
be able to:
1. Understand the concept of percent;
2. Convert decimal to percent and percent
to decimals; and
3. Apply the knowledge in percentage in
problem solving.
ENT 106: Pricing & Costing
1.1 ROUNDING OFF NUMBERS
Rounding off a decimal is a technique
used to estimate or approximate values.
Rounding is most commonly used to limit
the amount of decimal places. Instead of
having a long string of decimals places, or
even one that goes on forever, we can
approximate the value of the decimal to a
specified decimal place.
We can round to any place. After
rounding, the digit in the place we are
rounding will either stay the same, referred
to as rounding down, or increase by 1,
referred to as rounding up.
Prof. Rowena R. De Leon
When to Round Up
Rounding up means that we increase the
terminating digit by a value of 1 and drop off the
digits to the right. If the next place beyond where
we are terminating the decimal is greater than or
equal to five (5, 6,7,8,9), we round up. For example,
if we round 5.47 to the tenths place, it can be rounded
up to 5.5.
When to Round Down
If the number to the right of our terminating
decimal place is four less (4,3,2,1,0), we round
down. This is done by leaving our last decimal place
as it is given and discarding all digits to its right. For
example, if we round 6.734 to the hundredths place, it
can be rounded down to 6.73.
ENT 106: Pricing & Costing
Rounding is explained more simply in numbers in the following examples.
Example 1.1: Round 4. 87315 to the nearest hundredth (or two places past the decimal point).
The “7” occupies the final desired place, two places past the decimal point.
4.87315
The “3” is immediately to the right of the desired final place.
Since 3 is less than 5, round down. Drop all of the numbers more than two places past the decimal
point.
The answer is 4.87
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
Rounding is explained more simply in numbers in the following examples.
Example 1.1: Round 4. 87315 to the nearest tenth (or one places past the decimal point).
The “8” occupies the final desired place, one places past the decimal point.
4.87315
The “7” is immediately to the right of the desired final place.
Since 7 is greater than 5, round up. Drop all of the numbers more than one place past the decimal
point.
The answer is 4.9
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
 Self-check #1
Direction: Round off the following numbers as
indicated.
1. 15.7541 nearest hundredths
2. 469.6451 nearest tenths
3. 63.7635 nearest thousandths
4. 5,419.058 nearest tens
5. 172.54328 nearest ten thousandths
6. 9,017.53 nearest thousands
7. 8,720.127 nearest hundreds
8. 98,136.27 nearest units digit
9. 128.655 nearest hundredths
10. 561.0525 nearest thousandths
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
1.2 FRACTIONS
A fraction is a quotient of numbers, the
quantity obtained when the numerator is
divided by the denominator. Each fraction
consists of a denominator (bottom) and a
numerator (top), representing (respectively)
the number of equal parts that an object is
divided into, and the number of those parts
indicated for the particular fraction.
Thus ¾ represents three divided by
four, in decimals 0.75, as a percentage 75%.
The three equal parts of the cake are 75%
of the whole cake.
Also, fractions are rational numbers,
which means that the denominator and the
numerator are integers.
Prof. Rowena R. De Leon
 Fractions are numeric symbols of the
relationship between the part and the
whole.
 Common kitchen fractions used:
 1/8, ¼, 1/3, ½, 2/3, 3/4
 Fraction is part of a whole
number.
 3 out of 5 slices of pie
could be represented
by 3/5, (3 is the part, 5
is the whole amount)
 Also can be represented as a divisional
problem 3÷5
ENT 106: Pricing & Costing
Types of Fractions
 Proper (Common) Fraction
 Where the numerator is lower than
denominator.
 For example: ½ or ¼
 Mixed Number
 Is a whole number mixed with a
fractional part
 Improper Fraction
 Where the numerator is greater than or
equal to denominator.
 For example: 28/7, 140/70 and 28/28
 Lowest Term Fraction
 The result of reducing a fraction so that
the numerator and denominator no
longer have any common factors.
 For example: 14 = 14 ÷ 14 = 1
28 28 14 2
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
Converting Fractions
 To convert a whole # to a fraction, simply place
the whole number over 1.
For Example: 5 = 5
1
 Converting improper fractions to mixed
numbers: Divide the numerator by the
Denominator. The answer will be the whole #
and the remainder (if any) will be place over the
denominator of the original improper fraction to
form the fractional part of the mixed number.
For Example:
23
5
Prof. Rowena R. De Leon
43
5
4
5 ) 23
20
3
ENT 106: Pricing & Costing
Converting Fractions
 To convert a mixed number to an improper
fraction:
(a) Multiply the whole number by the denominator;
(b) Add the result to the numerator; and
(c) Place the resulting number over the original
denominator.
For Example:
3 2
5
17
5
3x5=15+2=17
5
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
Addition and Subtraction of Fractions
 Fractions that are going to be added or
subtracted together must have a common
denominator.
Another Example: Subtraction
3 - 1 = 9 -2
4 6 12 12
= 9–2
12
7
=
12
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
Multiplication of Fractions
 This process is done by simply:
 Multiply the Numerator x Numerator
 Multiply
the
denominator
Denominator
x
 Carry the numbers across for the new
numerator and denominator.
Alternative solution: by cancellation
For Example: 2 1 x 4 = 7 x 4
3
3
5
5
= 7x4
3x5
Prof. Rowena R. De Leon
= 28
15
or 1 13
15
ENT 106: Pricing & Costing
Division of Fractions
 Invert the second fraction by placing
denominator over the numerator.
 Next change the “÷” sign to “x” sign, then
proceed with multiplying the problem.
 Convert any mixed numbers to improper
fractions;
 Next, get the reciprocal of the divisor and
proceed as in multiplication.
For Example:
12
2 2 ÷ 2 =
÷ 2
5
3
3
5
6
26
3
or 2
= 12 x
=
10
10
2
5
or
3
2
5
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
 Self-check #2
Direction: Perform the indicated operations.
1. 1
+
2
2. 5 1 +
6
3. 12 + 2 +
9
4. 3 10
5. 5 6
8
1
8
1
4
1
3
1
8
3
24
=
=
6.
5
8
=
7. 12x 3
5
=
8.
=
9.
=
2 3 x 41 =
4
3
3
1 +
2
10. 5 3
8
Prof. Rowena R. De Leon
1
=
3
+
6
=
x 6 6 =
10
ENT 106: Pricing & Costing
1.3 DECIMALS
Decimals are a place vale system based on the
number 10. A decimal is the fractional part of a whole
expressed in powers of ten. A point (.) called a
decimal point, is used to indicate the decimal form of
a number.




.1
.01
.001
.0001
Prof. Rowena R. De Leon
=
=
=
=
One Tenth
One Hundredth
One Thousandth
One Ten-Thousandth
ENT 106: Pricing & Costing
Converting Decimals to Fractions
 Carry out the Division problem to the tenthousandths place and truncate.
 Truncate means to cut off a number at a
given decimal place without regard to
rounding.
 For example: 12.34567 Truncate to the
hundredths place would be 12.34
•: Write down the decimal divided by 1, like
this: decimal1
Example : 0.75
1
•Step 2: Multiply both top and bottom by 10 for
every number after the decimal point. (For example,
if there are two numbers after the decimal point,
then use 100, if there are three then use 1000, etc.)
x100
•Step 3: Simplify (or reduce) the fraction
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
Converting Decimals to Fractions
•: Write down the decimal divided by 1, like
this:
decimal1
•Step 2: Multiply both top and bottom by 10 for
every number after the decimal point. (For example,
if there are two numbers after the decimal point,
then use 100, if there are three then use 1000, etc.)
1. Example : 0.75
1
2.
x100
.75
1
=
75
100
x100
•Step 3: Simplify (or reduce) the fraction
3.
÷5
÷ 5
Answer
75 = 15 =
100
20
÷5
Prof. Rowena R. De Leon
÷
3
4
3
4
5
ENT 106: Pricing & Costing
Converting Decimals to Fractions
 Read the number as a decimal using place
value.
Examples:
 Write the number as a fraction.
⁴/₅ as a decimal is 4 ÷ 5 = 0.8
⁷⁵/₁₀₀ as a decimal is 75 ÷100 = 0.75
³/₆ as a decimal is 3 ÷ 6 = 0.5
 Reduce the lowest terms
 Seventy-Five one-hundredths
75/100 = 3/4
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
 Self-check # 3
A. Change the following fractions to
decimals.
1. 7
10
2.
5
8
3.
350
1000
4.
27
11
5. 4
B. Change the following decimals to fractions or mixed
numbers. Simplify to lowest term when possible.
1.
2.
3.
4.
5.
0.57
0.7
0.324
0.004
3.512
3
7
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
C. Change the following fractions
to percent.
1.
2.
3.
4.
5.
Prof. Rowena R. De Leon
3/8
5/6
4/5
5/9
2/5
D. Express the following percent
to fractions or mixed numbers and
simplify if necessary
1.
2.
3.
4.
5.
15%
2.3 %
0.74 %
0.218%
155%
ENT 106: Pricing & Costing
1.4 PERCENT
The term percentage means “part of a hundred”. The use of percentages to
express a rate is common practice in the foodservice industry. For example,
food and beverage costs, labor costs, operating costs, fixed costs, and profits are
usually stated as percentage of establish standard control.
To indicate that a number is a percentage, the number must be
accompanied by a percentage sign (%).
Converting Decimals to Fractions
 To convert a decimal to a percent, multiply
the decimal by 100 then affix the % symbol.
 An easier way is just to move the decimal
point two places to the right, then affix the
% symbol.
Prof. Rowena R. De Leon
Examples:
1. 0.75
2. 1.5
3. 0.027
4. 0.93
5. 57.145
6. 1.02
7. 0.0038
=
=
=
=
=
=
=
0.75 x 100
1.5 x 100
2.7%
93%
5,714.5%
102%
0.38%
=
=
75%
150%
ENT 106: Pricing & Costing
Conversion of a Percent to a Decimal
To convert a percent to a decimal, drop the
percent sign then divide the number in percent
by 100.
 The short cut is to simply move the decimal
point two places to the left then remove the %
symbol.

Examples:
1. 25%
2. 5%
3. 2.5%
4. 98%
5. 135%
6. 0.15%
Prof. Rowena R. De Leon
=
=
=
=
=
=
25/ 100 =
5/ 100 =
0.025
0.98
1.35
0.0015
0.25
0.05
If there is a fraction in the percentage, change
the fraction to decimal, then divide the number
by 100 or move the decimal point two places to
the left.
Examples:
1. ¾%
2. 20 ¼%
=
=
0.75%
20.25%
=
=
0.0075
0.2025
ENT 106: Pricing & Costing
Percentage in the Kitchen
In the kitchen, it is often necessary to work with percentages. Percentages
may be used to calculate and apply a yield percentage or food cost percentage.
The following formulas may be used:
Part
Percent = Whole
Part
=
Whole =
Whole x Percent
Part
Percent
When using the formulas, the following tips might be helpful:
 The number or word that follows the word of is usually the
whole number and the word is usually is connected to the
part.
 The percentage will always be identified with either the
symbol % or the word percent.
 The part will usually be less than the part.
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
Illustrative Problem :
1. 40% of P7,000 is _____________.
Solution:
Part = Whole x Percent
= P7,000 x 0.40
= P2,800
2. What is 25% of 40 kilos?
Solution:
Part = Whole x Percent
= 40 kilos x o.25
= 10 kilos
3. 75 is ____________% of 375.
Solution:
Percent =
=
=
Prof. Rowena R. De Leon
Part = 75
Whole 700
0.2
20 %
4. How many percent of 700 is 100?
Percent = Part
100
=
Whole 700
= 0.1429
= 14.29%
5. 15 ml is 20% of ____________.
Solution:
Whole
=
Part
Percent
=
15
0.20
Percent is converted to decimal when used in the
solution.
ENT 106: Pricing & Costing
Percent Meat Cuts
Applying the formula, we can determine the percentage of
different meat cuts.
To determine the percentage of the
different beef cuts, divide the weight of
each part by the total weight then multiply
by 100.
62 lb
26 lb
18 lb
24 lb
17 lb
52 lb
Examples:
Chuck
Sirloin
= 62lb = 0.2531 x 100% = 25.31%
245lb
19 lb
12 lb
15 lb
= 24lb = 0.098 x 100% = 9.80%
245lb
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
 Self-check # 4
A. Convert each of the following percentage
to decimal.
1. 12. 7%
2. 4 ¼%
3. 85%
B. Convert the following decimals to
percent.
1. 0.46
2. 0.05
3. 0.0356
Prof. Rowena R. De Leon
C. Find the missing terms in each of the
following problem. Round off to the
nearest tenths.
1. 24.5% of P3,265 is __________
2. 5 ½% of P2,575 is __________
3. 80% of P6,700 is ___________
4. 28 is ___________% of 120
5. 57 is ___________% of 85
6. 10 is ___________% of 150
7. P25 is 35% of ___________
8. P205 is 45.6% of _________
9. P2,460 is 86% of _________
ENT 106: Pricing & Costing
D. Determine the percentage of the following pork cuts.
29 lb
15 lb
24 lb
14 lb
4 lb
9 lb
27 lb
18 lb
8 lb
2 lb
Prof. Rowena R. De Leon
ENT 106: Pricing & Costing
ENT 106: Pricing & Costing
THE END
Prof. Rowena R. De Leon