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Work through the following scenarios to evaluate the difference between AP & EP costs as you make the decision to purchase either pre-made soup Product A or pre-made soup Product AA: Hints: 1. To determine equivalent and unit costs you will need to convert purchased units (such as pounds) into incremental units (such as ounces) 2. Remember that Y% represents the product yield relationship of EP / AP PROBLEM 1 Vendor 1 Vendor 2 Product A is $18.00 per gallon Y% of Product A = 92% Y% of Product A = 97% AP Units EP Units EP Units AP actual cost EP actual cost EP actual cost AP unit cost per oz EP unit cost per oz EP unit cost per oz Vendor 3 Vendor 4 Product AA is $5.00 per quart Y% of Product AA = 94% Y% of Product AA = 89% AP Units EP Units EP Units AP actual cost EP actual cost EP actual cost AP unit cost per Oz EP unit cost per oz EP unit cost per oz To conclude Problem 1: Which vendor has the best EP unit cost and therefore represents the cheapest purchasing option? a. PROBLEM 2 Assume your catering team is planning to sell a dish using either pre-made soup Product A or pre-made soup Product AA Assume you are adding another $0.15 of additional EP food cost to each dish with this cost coming from parmesan wafers, croutons, micro greens, etc. Assume the individual portion size of soup Product A and soup Product AA will be 8 fluid oz Remember that FC% is found by using the formula: unit cost / sales price = FC%, and that selling price is found by dividing plated unit cost by the desired FC% The selling price of both dish A and dish AA will be $8 Use the AP & EP cost data produced in Problem 1 to answer the following to 1 decimal place: . . Determine the EP food cost % of Product A from vendor 1 Determine the EP food cost % of Product AA from vendor 3 Determine the EP food cost % of Product A from vendor 2 Determine the EP food % of Product AA from vendor 4 a. Which vendor's product in Question 2 produces the lowest EP FC% when the dish is finally sold? Problem 3: After analyzing your figures the purchasing team has decided to use the vendor correctly identified in Problem 2 part a. Determine the minimum appropriate selling price of the dish to ensure that you remain in compliance with management's rule that the calculated FC % for this vendor's product not exceed 16%. Work through the following scenarios to evaluate the difference between AP & EP costs as you make the decision to purchase either pre-made soup Product A or pre-made soup Product AA: Hints: 1. To determine equivalent and unit costs you will need to convert purchased units (such as pounds) into incremental units (such as ounces) 2. Remember that Y% represents the product yield relationship of EP / AP PROBLEM 1 Vendor 1 Vendor 2 Product A is $18.00 per gallon Y% of Product A = 92% Y% of Product A = 97% AP Units EP Units EP Units AP actual cost EP actual cost EP actual cost AP unit cost per oz EP unit cost per oz EP unit cost per oz Vendor 3 Vendor 4 Product AA is $5.00 per quart Y% of Product AA = 94% Y% of Product AA = 89% AP Units EP Units EP Units AP actual cost EP actual cost EP actual cost AP unit cost per Oz EP unit cost per oz EP unit cost per oz To conclude Problem 1: Which vendor has the best EP unit cost and therefore represents the cheapest purchasing option? a. PROBLEM 2 Assume your catering team is planning to sell a dish using either pre-made soup Product A or pre-made soup Product AA Assume you are adding another $0.15 of additional EP food cost to each dish with this cost coming from parmesan wafers, croutons, micro greens, etc. Assume the individual portion size of soup Product A and soup Product AA will be 8 fluid oz Remember that FC% is found by using the formula: unit cost / sales price = FC%, and that selling price is found by dividing plated unit cost by the desired FC% The selling price of both dish A and dish AA will be $8 Use the AP & EP cost data produced in Problem 1 to answer the following to 1 decimal place: . . Determine the EP food cost % of Product A from vendor 1 Determine the EP food cost % of Product AA from vendor 3 Determine the EP food cost % of Product A from vendor 2 Determine the EP food % of Product AA from vendor 4 a. Which vendor's product in Question 2 produces the lowest EP FC% when the dish is finally sold? Problem 3: After analyzing your figures the purchasing team has decided to use the vendor correctly identified in Problem 2 part a. Determine the minimum appropriate selling price of the dish to ensure that you remain in compliance with management's rule that the calculated FC % for this vendor's product not exceed 16%

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