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TLE-Cookery
Quarter 1 – Module 4
Calculation of
Cost of Production
TLE-Cookery – Grade 7 and 8
Alternative Delivery Mode
Quarter 1 – Module 4: Calculation of Cost of Production
First Edition, 2020

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Published by the Department of Education

Secretary: Leonor Magtolis Briones
Undersecretary: Diosdado M. San Antonio

Development Team of the Module

Writer: Gemma G. Dela Cruz

Editor: Renato R. Salandanan, EdD
Reviewer: Ariel S. Valencia
Illustrator: Gemma G. Dela Cruz
Layout Artist: Gemma G. Dela Cruz
Cover Design: Emmanuel S. Gimena Jr.

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Chief Education Supervisor, CID : Milagros M. Peñaflor, PhD
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Education Program Supervisor, AP/ADM : Romeo M. Layug
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Cookery
Quarter 1 – Module 4
Calculation of
Cost of Production
Introductory Message
For the facilitator:

Welcome to the Cookery Grade 7 and 8 Alternative Delivery Mode (ADM)

Module on Calculation of Cost of Production!

This module was collaboratively designed, developed and reviewed by

educators both from public and private institutions to assist you, the teacher or
facilitator in helping the learners meet the standards set by the K to 12 Curriculum
while overcoming their personal, social, and economic constraints in schooling.

This learning resource hopes to engage the learners into guided and
independent learning activities at their own pace d time. Furthermore, this also aims
to help learners acquire the needed 21st century skills while taking into
consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the
body of the module:

Notes to the Teacher

This contains helpful tips or strategies that
will help you in guiding the learners.

As a facilitator you are expected to orient the learners on how to use this
module. You also need to keep track of the learners' progress while allowing them to
manage their own learning. Furthermore, you are expected to encourage and assist
the learners as they do the tasks included in the module.

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For the learner:

Welcome to the Cookery Grade 7 and 8 Alternative Delivery Mode (ADM)

Module on Calculation of Cost of Production!

The hand is one of the most symbolized part of the human body. It is often
used to depict skill, action and purpose. Through our hands we may learn, create
and accomplish. Hence, the hand in this learning resource signifies that you as a
learner is capable and empowered to successfully achieve the relevant competencies
and skills at your own pace and time. Your academic success lies in your own hands!

This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You
will be enabled to process the contents of the learning resource while being an active
learner.

This module has the following parts and corresponding icons:

What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in the
module.

What I Know This part includes an activity that aims to

check what you already know about the
lesson to take. If you get all the answers
correct (100%), you may decide to skip this
module.

What’s In This is a brief drill or review to help you link

the current lesson with the previous one.

What’s New In this portion, the new lesson will be

introduced to you in various ways such as a
story, a song, a poem, a problem opener, an
activity or a situation.

What is It This section provides a brief discussion of the

lesson. This aims to help you discover and
understand new concepts and skills.

What’s More This comprises activities for independent

practice to solidify your understanding and
skills of the topic. You may check the
answers to the exercises using the Answer
Key at the end of the module.

What I Have Learned This includes questions or blank

sentence/paragraph to be filled in to process
what you learned from the lesson.

What I Can Do This section provides an activity which will

help you transfer your new knowledge or skill
into real life situations or concerns.

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 Assessment This is a task which aims to evaluate your
level of mastery in achieving the learning
competency.

Additional Activities In this portion, another activity will be given

to you to enrich your knowledge or skill of the
lesson learned. This also tends retention of
learned concepts.

Answer Key This contains answers to all activities in the

module.

At the end of this module you will also find:

References This is a list of all sources used in developing

this module.

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of the
module. Use a separate sheet of paper in answering the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities
included in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with it.
If you encounter any difficulty in answering the tasks in this module, do not
hesitate to consult your teacher or facilitator. Always bear in mind that you are not
alone.

We hope that through this material, you will experience meaningful learning and
gain deep understanding of the relevant competencies. You can do it!

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 What I Need to Know

This module was designed and written to help you focus and learn skills in
calculating cost of production.

At the end of this module, you are expected to:

1. calculate cost of production; (TLE_HECK7/8PM-0e-5)

2. discuss principles of costing; and

3. compute peso markup and percentage markup.

 What I Know

Directions: Compute the peso markup and get the percentage markup based on
selling price.

Items Purchase cost Selling price Peso markup Percentage

/buying price markup
Example:
Doughnut 18.00 23.00 5.00 .28 or 28%

1. Bibingka 5.00 7.00 _______ _______

2. Cupcake 7.00 10.00 _______ _______

3. Polvoron 3.00 4.00 _______ _______

4. Chicharon 25.00 35.00 _______ _______

5. Yellow corn 10.00 15.00 ________ _______

6. Cheese Bread 25.00 32.00 ________ ________

7. Avocado 50.00 80.00 ________ ________

8. Loaf Bread 45.00 50.00 ________ ________

9. Egg pie 120.00 150.00 ________ ________

10.Fresh Pusit 300.00 400.00 ________ ________

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 Lesson
Calculation of
2 Cost of Production
Cost of production is important in any business. It is computed according to
standard procedure. Proper computation and calculation provides significant profit
when the selling price of products are met. They are reviewed and validated based
on enterprise production requirements.

What’s In

Directions: Arrange the jumbled letters to form words related to calculation of cost
of production. The meaning is provided for you to help you come up with the
correct word.
1. T C S O – price of an item
2. E M S I T – names of purchased things
3. U A K M P R – your profit per item
4. H U S A S P R E C T S O C – the price of an item that you buy
5. L L S I E G N I P E C R – cost or price of how much you sell the item
6. L E I D Y – the number of servings
7. F R P I T O – amount you earned between the purchase price and selling price
8. A Q I Y T N U T - number or amount of an item
9. Q L U A T Y I - kind or classification of an item
10. P O R I D U N T C O C S T O S - business costs involved in the
production of goods

Notes to the Teacher

This module is preparing students to determine principles of
cooking of food productions.

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 What’s New

Directions: Below shows sample cost production calculation specifically the peso
markup. Try to name the missing item/s. Choose your answer from the
box and write only the letter of the correct answer.

A. Peso markup B. Selling Price C. Purchase Cost

1. ITEM - POTATO

15.00 _______

–– 10.00 Purchase cost

5.00 _______

2. ITEM – CHICKEN LEGS

125.00 Selling Price

–– 80.00 _______

45.00 _______

3. ITEM – PORK MEAT

250.00 ________

–– 175.00 ________

75.00 Peso Markup

4. ITEM – BEEF TENDERLOIN STEAK

460.00 Selling Price

–– 350.00 ________

110.00 ________

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5. ITEM – LECHON KAWALI

395.00 _________

–– 280.00 Purchase Cost

115.00 _________

What is It

Food costing is important to know as it has a direct effect on the profitability of a

restaurant. It is the cost of your ingredients and does not include other costs, such
as labor and overheads. Food costing is an essential tool in determining whether food
costs targets are being met.

What are the principles of costing?

The cost principle is an accounting principle that requires assets, liabilities, and
equity investments to be recorded on financial records at their original cost.

To determine food costs is to take the raw food cost of the item and divide it by the
desired food cost percentage to get the final price. First, you have to know the cost
of every ingredient in your recipe from the olive oil and salt to the meat.

The food cost analysis is the first step in creating a restaurant budget, and its value
cannot be understated. When created properly, a food cost analysis can act as an
ongoing tool to monitor your business costs so you can charge your guest
appropriately to ensure you hit your profit margins.

Calculate standard portion costs

Calculate APQ (as purchased quantity) ingredient amounts for both costing and food
ordering purposes. Calculate yield and waste percentages (for both trimming and
cooking losses). Determine edible portion cost (EPC) or “true cost” of recipe
ingredients and menu items.

What affects food cost?

There are many possible situations that can cause food cost to rise. Some are
external factors, like the general cost of buying ingredients. Others may be internal,
such as waste in the restaurant kitchen or employee theft. Shrinking profits may be
a sign that your food cost is out of line.

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Why food costing is important:

• It’s the best way to manage profits.

• Food costing protects your inventory against over plating, theft, spoilage and
waste.
• Actual vs. theoretical. You know it in your head but what are the real numbers.
• Keeps on top of your vendors, watches their pricing.
• Accurately prices your recipes to reflect any price creep.

How to Calculate Markup Percentage

Markup is the difference between how much an item costs you, and how much you
sell that item for--it's your profit per item. Any person working in business or retail
will find the skill of being able to calculate markup percentage very valuable.

Instructions

1. Calculate your peso markup. This is done by subtracting your buying price from
your selling price.

Example:

Selling price 15.00

Purchase cost/buying price -10.00

Peso markup 5.00

2. Decide whether you want to calculate your percentage markup based on cost or
selling price. Once you choose which you will be using to calculate, it is important
you stick to the method you choose throughout all your calculations, or you will
end up with faulty data. If you decide to calculate your percent markup based on
cost, go on to Step 3. If you decide to calculate your percent markup based on
selling price, go on to Step 4.

3. Calculate percent markup based on cost. This is done by dividing the peso markup
by the cost.

Example:
Peso markup 5.00
Purchase cost/buying price ÷10.00
Percentage mark up .5 or 50%

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4. Calculate your percent markup based on selling price. This is done by dividing the
peso markup by the selling price.

Example
Peso mark up 5.00
Selling price ÷15.00
Percentage mark up .33 or 33%

5. Make sure you consistently use either cost of the product or selling price to find
the percent markup on an item. Even though the cost, selling price, and peso
markup will always be the same, the percentage markup will be drastically
different depending on if you calculate it using selling price or cost. Using selling
price will give you a lower percentage markup (assuming you are making a profit),
while using cost will give you a higher percentage markup.

Take a look at the sample table below.

Purchase
Selling
Cost/ Percentage Markup
Price
Buying Cost Peso
Items
Markup
by Selling
(in PH peso) (in PH peso) by Cost
Price

Bibingka 40.00 50.00 10 25% 20%

Buko Pie 120.00 150.00 30 25% 20%

Empanada 15.00 18.00 3 20% 17%

Turon 15.00 20.00 5 33% 25%

Puto
25.00 35.00 10 40% 29%
Bumbong

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 What’s More

Directions: Get the Peso Markup and calculate the Percentage Markup based on
the SELLING PRICE.

Percentage
Selling Price Purchase Cost Peso Markup
Markup

1. 24.00 18.00

2. 12.00 8.00

3. 35.00 25.00

4. 5.00 3.00

5. 24.00 18.00

6. 100.00 75.00

7. 315 250.00

8. 87.00 60.00

9. 180.00 90.00

10. 265.00 190.00

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 What I Have Learned

Directions: Given the following recipe and its estimated cost, compute for the total
purchase cost and impose a 50% mark up to determine the selling price
of your product.

Yield = 24 servings

Item Unit cost Total Cost Peso markup Selling Price per
serving
2 kg chicken 115.00/kilo _____

1 head of garlic 50.00/kilo 20pcs/kilo _____

4 Tbsp. soy sauce 15.00/bottle

Approx. 32T _____

1 tsp ground black 1.00/ small pack _____

pepper ½ t/pack

1/2 cup vinegar 12.00/bottle _____

Approx. 2 C/bottle

2 Tbsp. cooking oil 40.00/bottle _____

Approx. 32T

TOTAL _____ _____ _____

𝑇𝑂𝑇𝐴𝐿 𝐶𝑂𝑆𝑇+𝑃𝐸𝑆𝑂 𝑀𝐴𝑅𝐾−𝑈𝑃

Selling price =
𝑁𝑂.𝑂𝐹 𝑌𝐼𝐸𝐿𝐷

SP = _________

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 What I Can Do

Directions: Write the percentage markup of the following items based on

purchase cost.

Selling Price Purchase Cost Percentage

Markup

20.00 17.00 1.

12.00 9.00 2.

24.00 18.00 3.

7.00 5.00 4.

35.00 28.00 5.

89.00 60.00 6.

1050.00 850.00 7.

580.00 420.00 8.

3000.00 2500.00 9.

2195.00 1885.00 10.

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 Assessment

Directions: Compute the total purchase cost and give a 25% mark up to determine
the selling price of your product.

Yield = 12 servings

Selling
Items Unit Cost Total Cost Peso Mark
Price/Serving

2 kg ground
250.00/kilo
pork

90.00/kilo
2 pcs. of onion
12 pcs/kilo

45.00/kilo
1 head of
garlic
18 pcs./kilo

4 pcs. 140.00/kilo
medium
carrots 8 pcs./kilo

1.00/pack
1 tsp. pepper
½ tsp./pack

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 Additional Activities

ACTIVITY 1

Direction: Write True if the value of each number is correct and False if it is not.

Selling Purchase
Peso Mark up % Mark Up Answer
Price Cost

A. 30.00 23.00 7.00 30%

B. 45.00 38.00 5.00 18%

C. 12.00 9.00 3.00 33%

D. 120.00 95.00 25.00 26%

E. 8.00 5.00 3.00 70%

F. 75.00 68.00 9.00 10%

G. 16.00 12.00 4.00 33%

H. 15.00 10.00 5.00 50%

I. 90.00 75.00 15.00 25%

J. 100.00 80.00 20.00 30%

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ACTIVITY 2

Directions: Read and answer the given scenario.

Mrs. Benitez prepared Bake Mac for her online selling. Given the following recipe and
its cost. Compute for the total purchase cost and twenty percent (20%) peso markup
and get the selling price per serving and yield 15 servings.

Items Total Cost Peso markup Selling Price/serving

½ kg ground beef 200.00

½ head of garlic 10.00

1 pc. Of onion 5.00

2 pcs. bell pepper 15.00

1 kl spaghetti sauce 89.00

1 nestle cream 48.00

1 big evap milk 35.00

1 kg macaroni elbow 60.00

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 14
What’s In: What I Know:
What’s New:
1. cost Peso Markup Percentage
1. B, A 2. items Mark up
3. markup
2. C, A 1. 2 40%
4. purchase
3. B, C cost 2. 3 43%
5. selling price
4. C, A 6. yield 3. 1 33%
7. profit
5. B, A 8. quantity 4. 10 40%
9. quality
6. B, C 10. production 5. 5 50%
costs
7. C, A 6. 7 28%
25% 6 5. 8. B, A 7. 30 60%
40% 2 4.
29% 10 3. 9. B, C 8. 5 11%
33% 4 2.
25% 6 1. 10. C, A 9. 30 25%
What’s More: 10. 100 33%
Answer Key
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Activity 1 What I Can Do:
Additional 1. 18%
Activities:
2. 33%
A. True
3. 33%
B. False
4. 40%
C. True
5. 25%
D. True
E. False 6. 48%
F. False 7. 24%
G. True 8. 38%
H. True 9. 20%
I. False 10. 16%
J. False
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References:
DepEd K to 12 Basic Education Curriculum 2 Technology and Livelihood Education
– Commercial Cooking, Department of Education

"Cost Principle - What Is The Cost Principle?". Debitoor.Com, 2020.

https://debitoor.com/dictionary/cost-
principle#:~:text=Cost%20principle%20%E2%80%93%20What%20is%20the,
assets%20with%20Debitoor%20invoicing%20software.

"Cost Principle - What Is The Cost Principle?". Debitoor.Com, 2020.

https://debitoor.com/dictionary/cost-principle.

"You Know Food Costing Is Important BUT How Do You Impress That On Your
Kitchen Staff? | Reciprofity". Reciprofity, 2020. https://reciprofity.com/food-
costing-software-important-teach-kitchen-staff-importance-food-costing/.

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For inquiries or feedback, please write or call:

Department of Education – Region III,

Schools Division of Bataan - Curriculum Implementation Division
Learning Resources Management and Development Section (LRMDS)

Provincial Capitol Compound, Balanga City, Bataan

Telefax: (047) 237-2102

Email Address: [email protected]