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Calculating Food CostPercentages and Profit Status
for CCFP Unaffiliated Centers
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How to Calculate the Food Cost Percentage:
1. Verify the centers food costs. Review the OperatingExpenditures Worksheet(s) and receipts to verify the amountof allowable food costs.
2. Determine the centers total meal earnings. This is theamount of CCFP reimbursement (for meals + cash-in-lieu)earned by the center before the sponsors administrative fee
is deducted or other adjustments are made.
3. Divide the amount of verified food costs by the amount oftotal meal earnings to determine the percentage of earnings
being spent on food.Verified food costs
Total meal earnings
= Percent (%) spent on food
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How to Calculate Profit Status:
1. Verify the centers expenditures. Review expenditureworksheets, receipts, and PAR forms to determine the totalamount of allowable costs the center can claim. Thisincludes operating costs (food and non-food) and
administrative costs (if any) incurred by the center. (It isunusual for an unaffiliated center to have/claimadministrative costs.)
2. Determine the amount of the centers net reimbursementafter the sponsors administrative fee has been deducted.
3. Divide the amount of allowable expenditures by the netreimbursement amount to determine the percentage of
reimbursement being spent on the program. A result of lessthan 1.00 means the center is in profit status. A resultgreater than 1.00 means the center is spending more on theprogram than it is earning.
Allowable center expenditures Net reimbursement= Percent (%) spent on CCFP
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Exercise # 1
Compare an Independent Center to aSponsored Unaffiliated (U) Center.
Notice the differences and similarities inhow to perform food cost and profit statuscalculations for each type of center.
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Use the data in the upper part of the table to answer thequestions below.
IndependentCenter
U Center
Total meal earnings (including cash-in-lieu) $2,000 $2,000
Food purchases $1,000 $850
Non-food operating expenses $400 $850
Centers administrative expenses $400 $0
Amount retained by sponsor for administrative expenses N/A $300
1. How much reimbursement did the center receive for this
month?
2. What percentage of total meal earnings was spent on
food? Is the percentage okay or not?
3. What percentage of total meal earnings was spent on
program administration? Is the percentage okay or not?
4. How much did the center spend on the program for this
month?
5. Is the center in a profit status for this month? If yes, whatpercentage of reimbursement was spent on the program?
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Use the data in the upper part of the table to answer thequestions below.
IndependentCenter
U Center
Total meal earnings (including cash-in-lieu) $2,000 $2,000
Food purchases $1,000 $850
Non-food operating expenses $400 $850
Centers administrative expenses $400 $0
Amount retained by sponsor for administrative expenses N/A $300
1. How much reimbursement did the center receive for this
month? $2,000 $1,700
2. What percentage of total meal earnings was spent on
food? Is the percentage okay or not?
3. What percentage of total meal earnings was spent on
program administration? Is the percentage okay or not?
4. How much did the center spend on the program for this
month?
5. Is the center in a profit status for this month? If yes, whatpercentage of reimbursement was spent on the program?
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Use the data in the upper part of the table to answer thequestions below.
IndependentCenter
U Center
Total meal earnings (including cash-in-lieu) $2,000 $2,000
Food purchases $1,000 $850
Non-food operating expenses $400 $850
Centers administrative expenses $400 $0
Amount retained by sponsor for administrative expenses N/A $300
1. How much reimbursement did the center receive for this
month? $2,000 $1,700
2. What percentage of total meal earnings was spent on
food? Is the percentage okay or not?
50%
YES
42.5%
NO
3. What percentage of total meal earnings was spent on
program administration? Is the percentage okay or not?
4. How much did the center spend on the program for this
month?
5. Is the center in a profit status for this month? If yes, whatpercentage of reimbursement was spent on the program?
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Use the data in the upper part of the table to answer thequestions below.
IndependentCenter
U Center
Total meal earnings (including cash-in-lieu) $2,000 $2,000
Food purchases $1,000 $850
Non-food operating expenses $400 $850
Centers administrative expenses $400 $0
Amount retained by sponsor for administrative expenses N/A $300
1. How much reimbursement did the center receive for this
month? $2,000 $1,700
2. What percentage of total meal earnings was spent on
food? Is the percentage okay or not?
50%
YES
42.5%
NO
3. What percentage of total meal earnings was spent on
program administration? Is the percentage okay or not?
20%
YES
15%
YES
4. How much did the center spend on the program for this
month?
5. Is the center in a profit status for this month? If yes, whatpercentage of reimbursement was spent on the program?
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Use the data in the upper part of the table to answer thequestions below.
IndependentCenter
U Center
Total meal earnings (including cash-in-lieu) $2,000 $2,000
Food purchases $1,000 $850
Non-food operating expenses $400 $850
Centers administrative expenses $400 $0
Amount retained by sponsor for administrative expenses N/A $300
1. How much reimbursement did the center receive for this
month? $2,000 $1,700
2. What percentage of total meal earnings was spent on
food? Is the percentage okay or not?
50%
YES
42.5%
NO
3. What percentage of total meal earnings was spent on
program administration? Is the percentage okay or not?
20%
YES
15%
YES
4. How much did the center spend on the program for this
month?$1,800 $1,700
5. Is the center in a profit status for this month? If yes, whatpercentage of reimbursement was spent on the program?
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Use the data in the upper part of the table to answer thequestions below.
IndependentCenter
U Center
Total meal earnings (including cash-in-lieu) $2,000 $2,000
Food purchases $1,000 $850
Non-food operating expenses $400 $850
Centers administrative expenses $400 $0
Amount retained by sponsor for administrative expenses N/A $300
1. How much reimbursement did the center receive for this
month? $2,000 $1,700
2. What percentage of total meal earnings was spent on
food? Is the percentage okay or not?
50%
YES
42.5%
NO
3. What percentage of total meal earnings was spent on
program administration? Is the percentage okay or not?
20%
YES
15%
YES
4. How much did the center spend on the program for this
month?$1,800 $1,700
5. Is the center in a profit status for this month? If yes, whatpercentage of reimbursement was spent on the program?
YES
90% NO
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Exercise # 2
Calculate Center As food cost
percentages for:1. December 2008
2. First quarter of FY 2009 (10/08 12/08)
Assume that all amounts on the followingreport have been verified by supportingdocumentation.
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First, lets look at December 2008.
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$2,282.22 = Food Costs for December 2008
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$4,466.09 + $788.75 = $5,254.84Total Reimbursement for December 2008
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$2,282.22 / $5,254.84 = 43% Spent on Food in December 2008
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Next, lets look at First Quarter FY 2009.
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$7,715.67 = Food Costs for First Quarter FY 2009
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$12,735.07 + $2,247.35 = $14,982.42Total Reimbursement for First Quarter FY 2009
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$7,715.67 / $14,982.42 = 51% Spent on Food in First Quarter FY 2009
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Exercise # 3
Calculate Center Bs profit status for:
1. December 20082. First quarter of FY 2009 (10/08
12/08)
Assume that all amounts on the following
report have been verified by supportingdocumentation.
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Lets look at December 2008.
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$279.26 + $435.00 + $3.72 = $717.98Total Expenditures for December 2008
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$843.35 = Center Earnings for December 2008
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$717.98 / $843.35 = 85% of Reimbursement Spent for December 2008
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Now well look at First Quarter FY 2009.
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$541.17 + $957.00 + $16.72 = $1,514.89 TotalExpenditures for First Quarter FY 2009
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$1,398.50 = Center Earnings for First Quarter FY 2009
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$1,514.89 / $1,398.50 = 108% of ReimbursementSpent for First Quarter FY 2009
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Based on this report, what is a quick way to see if the center is inprofit status for any month or for the quarter?
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The last Total column shows the difference between what the center
spent and what it earned. A negative amount indicates that the centerspent more than it earned. A positive amount indicates that the center didnot spend all of its earnings, thus it is in profit status.
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Based on this report, what is a quick way to calculate the profi tstatus percentage for December 2008?
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Divide the amount in the last Total column by the amount in the Earnings column. For example: $125.37 / $843.35 = 15% profit status for
December 2008. This confirms our earl ier calculation, which showed thatthe center only spent 85% of its earnings for December 2008, thus under-spending by 15%.
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