What is a Formula to Use to Determine Cost of a Wasted Product?

Question

Hi there! I am learning from modules at my new workplace, and a question about determining a cost has been running through my mind. I can never seem to find how to correlate the information. If there is a particular formula that I could use to help determine a value, I would feel much more comfortable!

The question I am met with is:

“True or false? A cafe pays $20 per/kg for their house blend and they use 22 g of espresso to produce a double shot. The baristas accidentally use 2 g of coffee extra every time they produce an espresso for a whole year? That means after a year of making 400 coffees per day, you could generate a coffee bill over $5000 higher than it should be.”

I know the answer is ‘true,’ but what is the math involved to figure this out?

Answer 1

Assume they are open 365 days.

400 double shots per day.

Desired coffee use per day = 400 double shots *22g =8800 grams per day. or 3212 kg per year.

Actual use is 400 Double shots time 24g =9600 grams per day times 365 days =3504 kg per year =292 kg the net excess cost is $20/kg *292kg = $5,840