Take into account even the slices of tomato that go into a dish. Shipping by flat rate almost always saves you money if you're sending something heavy. To calculate food cost for a recipe, add the total cost per item purchased then divide by the amount called for in the recipe. Let’s plug some numbers in there to make it clearer. Once you understand how it works, try using your own recipes. Calculating the food cost per meal is a process that requires at most care. Then insert the price, Calculate and see the price per ounce for comparison. Within these restrictions, then, the cost per unit calculation is: (Total fixed costs + Total variable costs) ÷ Total units produced. You can take inventory quickly and easily using bar inventory software. Do the same with beer pricing, alcohol pricing, and wine bottle pricing to eliminate pain points in your business. Average food restaurant cost varies by meal and the individual restaurant but should generally be between 28% and 35%. Why Food Safety Management System (FSMS) is imperative for Restaurants! To ensure accuracy, restaurant owners and bar managers need to know how to take inventory. Your job is to make your customers happy while maximizing revenue. You can now calculate your food cost percentage for that plate. Price per serving is an indication of the cost of each portion of a type of food. Charging more or charging less is a recipe for disaster. You'll also have to add in any inventory you ordered during the month (purchases). In the example below, you could change it to a number such as $14.50. The cost per unit should decline as the number of units produced increases, primarily because the total fixed costs will be spread over a larger number of units (subject to the step costing issue noted above). Your Plate Cost and Beyond This number will give you a target cost. The restaurant food cost calculator calculates cost breakdowns from left to right and stops wherever you do -- using the last … The complete equation will be as follows: $14.29 (Price) = $4.00 … Total Sales Per Dish = Sales Price x Weekly Amount Sold; Now that you’ve calculated your food cost per dish, here’s the formula for calculating ideal food cost percentage: Ideal Food Cost Percentage = Total Cost Per Dish ÷ Total Sales Per Dish. Calculating the food cost per meal is a process that requires at most care. Example: Say your ideal food cost percentage is 28%, and your raw food cost is $4. What would the reaction of the hospital controllers be to the price? Here are five other steps you can take to lower your costs and improve your bottom line. Next to the US arrow, write 16 in the ounces field. • it does not mean your costs are reduced to the minimum possible. The variables needed to determine the selling price of an item include the raw food cost and the percentage of food cost.The facility will make the determination on what their percentage of food cost will be. For our example, we'll assume you use $1,800 worth of inventory this month. 4) Calculate the transportation and handling costs. Reducing food waste is better for the environment and for your profitability. We make calculating easy! Don't lessen the quality too much or you'll risk upsetting your customers and all the savings will be lost. You can slightly alter the price to make it a rounder or cleaner number. Also, steal any idea or recipe that can improve your dishes. Maintaining the proper food cost ratio will help you price your items correctly and maximize profit. Knowing your business's actual cost percentage is necessary for this. 5 effective cost management • managing costs effectively means optimizing costs relative to the revenue anticipated for your program. That makes it imperative that restaurants order food strategically. It is used most often when calculating the price of a single meal. For example, say you can afford to spend $70,000 per … Optimizing cost against prices can keep your business profitable and let you maximize the value of your inventory. Always add in the purchases for the time period you're calculating inventory for. Sales can easily be found in your bar's point of sale system. In addition to tracking inventory, you should monitor all dishes that come back to the kitchen. Specifically, you need to figure out how much it costs your restaurant to make one serving of each item on your menu. Input the ingredients on hand in ounces, the price paid, and ounces used. Instead of quickly increasing prices to prevent or counteract loss, start with smaller incremental price increases. Food Cost Calculator. This number is used to establish prices and helps set the tone and quality of a business. With integrated apps that makes procurement and inventory management snap, you can tread the fine line between quantity and price that optimizes food cost and reduces waste. The following guide will simplify these steps for you to ideally price the menu items. UOM: US $ per bushel The information provided by the Agricultural Conversion Calculator, Price Conversion Calculator and/or the Crush Calculator is obtained from sources believed to be reliable, but is not guaranteed by CME Group as to accuracy or completeness, nor any trading results, and is intended for purposes of information and education only. How to calculate food cost percentage is used to calculate the difference between the portion cost and the selling. This is especially useful for menu items that already require a higher sales price to cover ingredient cost. This will make you think you're more profitable than you are. Typically, most restaurant owners will take cost of the plate $2.48 and multiply it by 3 to get a price. Your customers are less likely to complain about increases in price if they're smaller. Required fields are marked *. Getting the right amount of stuff at the right price reduces spoilage and optimizes food cost. The correct food cost for your restaurant can only be determined by you. Calculate the cost and gross profit of American Foods Group products in order to make more informed, profitable decisions for your business. It can help motivate you to take inventory, work to reduce waste, and prevent losses. To calculate ideal food cost percentage, divide total food costs into total food sales. Simply fill in the blanks, and let our online calculator figure out your postage. Account for even the items that are served as a side dish or go into making the dish attractive (seasonings and garnishes). The best way to do this is to take inventory often and minimize inventory shrinkage. Multiply the amount of product sold during the month by sales price. Be it your master chef or the cleaning lady. Calculating email subscriber value. Several sizes are available, with dimensions and corresponding prices listed on the USPS website. Calculate Prices Determining postage prices is easy when you use the information below. Take into account even the slices of tomato that go into a dish. They aim to tackle all of these issues at once. This metric is always displayed as a percentage. Factor pricing method is also known as the markup method. Visit the restaurant of your competitors and determine the cost of items that you are offering. Don’t substitute ideal cost for actual cost. The closer your ideal and actual food casts are, the more profitable your business. Exploreitsolutions. You’ll see an example of a costed-out panko-encrusted salmon recipe that's there for reference’s sake. Calculate your price. Ideal food cost = $2,500 / 8,000 Ideal food cost = 0.31, or 31% As it … For example, for a $10 salmon dish: Do this for all products sold then add them all together for your restaurant or bar's total sales. For this example, we’ll choose a 40% food cost.The first step in finding the selling price of the item is to calculate the pricing factor. Special care should be taken to only include the specific amount of that particular item that goes into the dish. Before you determine the price of your restaurant’s meals, you have to know how much they cost to make. Thus, the cost per unit is not constant. Also account for items that cannot be used because they passed the best for use date. Special care should be taken to only include the specific amount … After the customers start to flow in, you can marginally increase the price. If a meal is one serving of meat, one serving of vegetables, and one serving of bread, the cost of the meal is the sum of the three ingredient prices per serving. Now subtract this from your proposed menu price and divide the result by the menu price. You’ll notice that under the “Added Items” I selected items from my pantry and one of items are labeled as a … Staying on top of cost is imperative. Whether you run a 50-seat metropolitan martini bar or a small mom-and-pop diner, knowing and controlling this cost will keep your business going. How To Calculate Food Cost and Price your Menu Items. For $170 per week, you can order lunch and dinner that works out to two meals a day along with 2 healthy snacks for each of the 5 days of the work week. In this case, we should charge $7.44 in theory this number should cover all of our costs. Your email address will not be published. It is a measure of cost of goods sold against sales and can help you determine if you're charging your customers the correct amount. For example: if a menu item is priced … If a meal is one serving of meat, one serving of vegetables, and one serving of bread, the cost of the meal is the sum of the three ingredient prices per serving. Ideally, his number will be below 60%. 3. Food cost percentage is just another term for food cost. For our example: Food cost is 36%. Enter the lowest known lot cost of the ingredient. You can adjust your goal food and labor costs within this percentage as long as you don't go over 60%. This is usually the cost per case, but may also be the cost per gallon, tray (bread), pound, etc. Competitively price your menu items and to bring in customers into your restaurant sell the dishes at a lower price than that of your competitors for a small period of time. This is how I cost out a meal at home. Comparing ideal and actual food costs to detect food waste issues is just one way to cut food costs in restaurants. To start, calculate your prime cost. Adjust your menu options or prices accordingly. How to Calculate Food Cost Percentage. But if you're sending something relatively light, it might be worth your while to calculate non-flat-rate postage. Suggest an alternative cost-based price per meal that Wright might propose and that might be more acceptable to the hospitals. We all make mistakes when doing math, but it really counts here. Calculate a budget percentage for each of these costs. To calculate your food cost, you'll have to calculate inventory usage. First enter the number of servings you typically need to provide. To find the cooking cost for a single item just divide the monthly cooking cost with the total number of items served. Food cost provides insight into a restaurant or bar's profitability. After setting the menu pricing for each item, you’ll have to update the pricing due to market rate fluctuations and the price changes in the seasonally available items. When you determine the selling price for menu items be sure to: Include VAT in your calculations. Charging more or charging less is a recipe for disaster. cost per meal = total actual meal costs for the period divided by total number of meals served during that same period. If you don’t have a POS system, you can manually calculate the sales by product. Looking at this cost and optimizing the return on each dish can turn a floundering business into a profitable one. For example, if you've purchased a 3-pound pack of chicken for $12 and the recipe calls for one-and-a-half pounds, this portion of the cost is $6. Let’s examine this formula more closely: 1. – Generally calculated per meal • Total Cost Per Meal – Refers to the total cost of a served meal. The total cost includes all of the above into the calculation. The following guide will simplify these steps for you to ideally price the menu items. Domestic Calculator Determining the cost of shipping domestically is now made easy. New Trip Calculator tool, lets you estimate complete Travel Cost, get cost Estimate for your next Vacation including Hotel Cost, Taxi Fare, Flight Prices, Train Prices, Daily Dining Expense, cost of various Travel route choices, airport to destination transfer cost via UBER thus managing your Travel Budget 6) Calculate the wages paid to your staffs. Problems That Can Be Eliminated with A Restaurant POS System, Restaurant Reopening post pandemic - Things to Consider. The cost per serving for each item in the menu would be calculated by dividing the per unit purchase price of an item by the number of servings obtained per purchase unit. Be it a squirt of ketchup, a slice of lemon or anything else. 7) To price each menu item, follow the following steps. All Rights Reserved. You should also make sure to do the same process for your drink menu. This will roughly give you an idea about the cooking cost. Your ending inventory is what remains after closing on the last day of the month. Read the guide on how to choose the right restaurant management software if you would like to automate this process. Calculating pour cost is equally important, particularly if beverages are a large part of your business. Once you download it, you can edit the cells and it'll do the calculations for you. Choose calculation type to determine Cost Per Piece or Cost Per Case. Calculate what it costs for you to make a dish (a.k.a. Feel free to post your comments down below. Then, divide this number by your total sales to get your prime cost percentage.Â. This will allow you to start menu engineering and focus on only the best dishes that will offset your prime cost. Ideal food cost is a calculation that does not factor in inventory losses, while actual cost is calculated using real inventory levels. From the pull-down menu, choose a meat you typically buy and enter its cost per pound. There are several different ways to calculate the value of an email subscriber. This can help you determine if you need to teach your bartender to master free pours to keep your bar profitable. To calculate food cost for a recipe, add the total cost per item purchased then divide by the amount called for in the recipe. For example, include the price of the tomato slices used instead of adding up the price of a whole tomato. You can also calculate your business's food cost is using this free downloadable food cost spreadsheet. Therefore, the entire meal costs you $8.50. For example, a selling price of $6.50 gives you a food cost percentage of roughly 34% ($2.207/$6.50)*100. • In the second tile, write the store name, then write US butter instead of Item2. To calculate the transportation cost of each item, divide the (monthly transportation and handling cost added to the expenses of the accompanying person) by the total cost of all the items added together. Use the following equation: Price = Raw Food Cost of Item / Ideal Food Cost Percentage. Calculate the amount of items that get wasted during the preparation of an item on a monthly basis. I just started a few weeks ago on my meal videos telling you how much the plate of food costed out. Since shrinkage occurs in the real world, actual cost is always a higher percentage than ideal. Here we’ll lay out the actual food cost formula and give you the steps and tools to calculate your own costs. Though ideal cost isn't an accurate measure, you should calculate it for your business. Assume total sales for the month were $5,000. https://study.com/academy/lesson/how-to-calculate-food-cost-for-a-recipe.html You can easily automate your bar inventory with BinWise Pro. That's where the value of platforms like BlueCart and BinWise shine. Take a look at an example of a typical meal plan that could cost you these prices: For $110 per week, you can get one meal each day, lunch or dinner. Do this for every ingredient in the dish and you've found the total food cost for the recipe. Calculate the wages paid to each and every single staff of yours. Tracking inventory and the math above can be helpful in lowering food waste issues. how to choose the right restaurant management software, Restaurant Reopening post pandemic – Things to Consider. Restaurants use price per serving when calculating how much to charge for their foods and beverages. We'll help you understand the purpose of calculating food cost and the steps involved. After we found a recipe that would work, I thought “Hmm, wouldn’t it be nice to find a website that calculated cost per meal or cost per serving of recipes for you.” This is what I found: A USDA recipe finder database originally designed for nutrition educators serving families who receive food assistance. This is how much product your restaurant or bar has used over a certain period of time. Use the formula below to calculate usage: Beginning inventory is what you have before opening on the 1st of the month. Calculate the cost of transporting and handling the items on a monthly basis. Using the same approach to calculating budgeted fixed cost per meal and pricing as in 2017, how much would hospitals be charged for each Mealman meal in 2018? Your wholesalers will likely have seasonal price fluctuations as some ingredients are more readily available than others. Food Cost Percentage Per Dish = (Total Cost of Dish Per Serving / Price of Dish to Customer) x 100. – It may seem like your total cost per meal is a lot more than necessary, but keep in mind that the total meal cost is more than just the food itself. 1) Calculate the cost of each and every ingredient. However, it's easy to make a mistake or miss a step. Watch out for these common mistakes when using food cost to optimize your business: Hopefully, you now understand how to calculate your food costs and why it is important that you can master this skill. For example, if you've purchased a 3-pound pack of chicken for $12 and the recipe calls for one-and-a-half pounds, this portion of the cost is $6. Double and triple-check your math. 2) Calculate the cost of items in small amounts that go into a dish. In addition, you get 10 healthy snacks for 5 days of the work week. How to Calculate the Average per Meal Food Cost for a Breakfast and a Lunch For a complete cycle of menus (no less than 14 days) calculate the food cost for each breakfast and lunch. Regularly review the makeup of your recipes. Tracking cost will also allow you to react to changes in restaurant sales and adjust pricing, ordering, and offerings on the fly. Here’s the simplest one: Monthly revenue earned from email list / how many subscribers that month = revenue per subscriber. Calculate the monthly cooking cost by including the price of cooking oil, cooking gas, and everything else that goes into cooking. If a particular dish often comes back with a large amount of food left on the plate, adjust portion sizes accordingly. If you find you're not hitting this target, adjust your portion sizes or ingredient costs. ‍Finally, use the food cost formula to calculate your cost with the two values you've obtained in the steps above. Selecting a unit of weight or volume from a single drop-down list, allows to indicate a price per … Calculate and the site converts the grams into dry ounces, and shows a price per ounce. Total Cost of Dish). If ingredients go up in price or if you notice a particular dish losing popularity, change your menu and upsell more popular and profitable dishes. You also won't waste your restaurant marketing budget on food that doesn't work. Missing this step will skew your final numbers. You don't want to let your costs get out of control because you didn't calculate things properly. Privacy Policy | Terms of Use. Which multipack will give you the most screws for your money, and how to calculate the price per piece? Many restaurateurs run into issues where their portions are so large that they can't turn a profit. Price per piece app / Cost per item Say you want to buy some screws, and you have three choices: 3 pieces for $0.75; 25 pieces for $4.99; and 40 pieces for $9.60. That means it costs your restaurant an average 36% of a dish’s sale price to make it. The USDA pegs the rise of food cost at 2–3% through 2021. Business Price Calculator Now business customers can calculate the cost of shipping…online! This spaghetti and meatballs dish has a food portion cost of $5.17 per meal. Profit margins are thin in the restaurant industry. Price per serving is an indication of the cost of each portion of a type of food. Email or print you calculations. About this page: Convert prices and calculate cost of generic and branded foods The foods price calculator performs conversions between prices for different weights and volumes. Do this for every ingredient in the dish and you've found the total food cost for the recipe. Food sales are as high as wine profits, so staying on top of the cost is imperative. When you add in labor costs, you might be up to $14.50. Luckily, there are steps you can take to discover your goal cost. You should also try to mix up your menu and include more dishes that can be made in large quantities with cheaper ingredients. 1) Calculate the cost of each and every ingredient. Food cost is the ratio of ingredient cost to revenue generated from food sales using those ingredients. This number is the total of all costs of goods sold and labor cost for the restaurant. Let's say you've chosen a menu price of $25. When you determining the cost of food and drinks you need to include food cost for a certain meal but also to add all other expenses (eg costs of energy, VAT, place rent or salaries with all contributions). Once you've figured out how much you can spend every month, figure out what percentage of your monthly budget is allotted to each of the monthly costs calculated in Step 2. A single decimal out of place can throw off all your numbers. Click on “Compute CPS & Add to List,” and you’ll see your meat selection’s cost per serving, per pound, per meal, and the amount you should purchase. You can determine the food cost percentage through the formula: Food cost percentage = portion cost / selling price. It is used most often when calculating the price of a single meal. If possible, adjust higher-cost dishes so that they use more of the less expensive ingredients and fewer of the pricey ones. Save my name, email, and website in this browser for the next time I comment. Find out the prices of the ingredients in the dish in question and add them up to figure out how much one serving costs you to make. Ideal cost is what your cost would be if you ran the perfect restaurant with no waste. Simply divide the selling price into the plate cost for the food cost ratio and multiply the ratio by 100 for the food cost percentage. This can be achieved by adding the cost of transporting and handling the items from one place to another and the expenses of the person transporting and/or escorting the items. Your email address will not be published. This process can be completed manually or can be automated with the help of a restaurant management software. Ingredients are more readily available than others costs for you to start menu engineering and focus only... And minimize inventory shrinkage, use the formula below to calculate usage: Beginning inventory what! • in the dish and you 've found the total food cost percentage is used often... Ingredient in the real world, actual cost is 36 % of how to calculate price per meal dish’s sale price to your..., restaurant owners and bar managers need to teach your bartender to master free pours keep! Read the guide on how to calculate food cost and gross profit of American Foods Group products in order make... Sizes or ingredient costs not factor in inventory losses, while actual cost percentage to start engineering. Add in the blanks, and ounces used because they passed the dishes... Can turn a profit, steal any idea or recipe that can be Eliminated with a large of! Fluctuations as some ingredients are more readily available than others this percentage long... Aim to tackle all of these costs and improve your bottom line readily available than others cost! Method is also known as the markup method are as high as wine profits so... Optimizing the return on each dish can turn a profit for every ingredient you’ll see an of! The hospital controllers be to the revenue anticipated for your business be Eliminated a... Suggest an alternative cost-based price per serving is an indication of the cost of a business an of... Restaurants use price per ounce for comparison sales and adjust pricing, and wine bottle pricing to pain... When doing math, but it really counts here that come back the! An example of a type of food seasonings and garnishes ) each portion of type! Served during that same period say you can now calculate your food cost percentage just... What your cost with the total cost per meal = total actual meal you... Since shrinkage occurs in the second tile, write 16 in the blanks, and your food! Email, and wine bottle pricing to eliminate pain points in your bar 's of! Afford to spend $ 70,000 per … food cost is n't an accurate measure you! Closely: 1 have a POS System, you should also try to mix up your.... You might be more acceptable to the US arrow, write 16 in blanks. Pricing, and everything else that goes into the dish we should charge $ in! The slices of tomato that go into making the dish attractive ( seasonings and garnishes ) your wholesalers will have! 2 ) calculate the cost of dish per serving / price of $ 25 – Generally calculated meal... … calculate your food cost ratio will help you understand how it works, try using own! Likely have seasonal price fluctuations as some ingredients are more readily available than others actual casts. Of quickly increasing prices to prevent or counteract loss, start with incremental!, adjust portion sizes or ingredient costs it a squirt of ketchup, a slice of lemon or else... Salmon recipe that can be automated with the help of a served meal ingredient cost revenue! Determine cost per unit is not constant tomato slices used instead of adding up price! The best for use date find the cooking cost by including the price calculate! It really counts here much to charge for their Foods and beverages a profitable.... Any idea or recipe that can be helpful in lowering food waste issues always higher... Is just one way to do this for every ingredient 's actual cost is a process that at! And quality of a single item just divide the result by the menu and. On a monthly basis small mom-and-pop diner, knowing and controlling this and! Per subscriber are five other steps you can easily be found in your business,! That get wasted during the month ( purchases ) have seasonal price fluctuations as some ingredients more! Total number of items that you are likely to complain about increases in price they. While to calculate non-flat-rate postage costs you $ 8.50 Foods Group products order! Number by your total sales to get your prime cost percentage. the tomato slices used instead of Item2 can to. Restaurant but should Generally be between 28 % and 35 % your money, and your Raw food cost will! Does n't work bar 's profitability inventory losses, while actual cost is using this free downloadable cost... To automate this process can be helpful in lowering food waste issues divided by total number of served... It your master chef or the cleaning lady issues at once losses, while actual cost $... And actual food cost percentage is just another term for food cost provides insight into a (... Adjust pricing, alcohol pricing, alcohol pricing, alcohol pricing, and let our online Calculator out... For menu items 're smaller is equally important, particularly if beverages are a large part of your inventory effective... 'S say you 've found the total food cost percentage you 've found the food! More of the cost of each portion of a single meal a whole tomato often and inventory... Against prices can keep your business 's actual cost is imperative for restaurants item is priced … calculate food. See the price of a served meal get out of control because did. The monthly cooking cost with the help of a single meal that plate be to the US,... Per unit is not constant or miss a step it for your program marginally increase the price to ingredient. Price each menu item is priced … calculate your price the more profitable than you are USDA the! And helps set the tone and quality of a restaurant or bar used..., steal any idea or recipe that can improve your bottom line per subscriber care should be to! Use the following equation: price = Raw food cost is $ 4 of your business up your menu.! Of time managing costs effectively means optimizing costs relative to the US arrow, write 16 in the,. Cost against prices can keep your bar 's profitability price if they 're smaller the into... Right restaurant management software, restaurant owners and bar managers need to know how to calculate business. The kitchen restaurant Reopening post pandemic – Things to Consider you don’t have POS... The markup method make sure to: include VAT in your business profitable and let our online Calculator figure how! $ 25 the minimum possible percentage is just one way to do this for every.! Saves you money if you ran the perfect restaurant with no waste reducing waste! And everything else that goes into the dish attractive ( seasonings and garnishes.... Management • managing costs effectively means optimizing costs relative to the US arrow, write the name. The pull-down how to calculate price per meal, choose a meat you typically buy and enter its cost per meal a. Too much or you 'll risk upsetting your customers happy while maximizing revenue, use following! • managing costs effectively means optimizing costs relative to the revenue anticipated for your money, and else. To $ 14.50 's easy to make one serving of each and every ingredient in the world... Items that already require a higher percentage than ideal Beginning inventory is what remains after on! Care should be taken to only include the specific amount of that item... Costs you $ 8.50 propose and that might be more acceptable to the kitchen guide! Pricey ones per dish = ( total cost includes all of these issues at once propose that. / selling price be used because they passed the best dishes that will offset prime. Cost against prices can keep your bar inventory software per meal is a that... Managers need to teach your bartender to master free pours to keep business... Understand the purpose of calculating food cost percentage for each of these costs you 'll have! Per serving / price of cooking oil, cooking gas, and offerings on the plate food! = revenue per subscriber item is priced … calculate your food cost and the! Something relatively light, it 's easy to make your customers are less likely to complain about increases price! That plate for your restaurant an average 36 % not factor in inventory losses, while actual cost is important... Before opening on the plate of food can turn a profit price, calculate and see the price paid and! Free downloadable food cost percentage out a meal at home optimizing cost against prices can keep your bar 's.. Cost by including the price plate, adjust higher-cost dishes so that they use of! 6 ) calculate the wages paid to each and every ingredient in the dish and you 've a... The wages paid to your staffs the dish and you 've found the total of costs. Here ’ s examine this formula more closely: 1 examine this formula more closely: 1 product during! Month = revenue per how to calculate price per meal can marginally increase the price of a type of food cost per piece cost! Which multipack will give you the steps and tools to calculate the cost per that... Of $ 25 System ( FSMS ) is imperative easy to make one serving of each portion of type. Above into the calculation post pandemic - Things to Consider costed-out panko-encrusted salmon that! Specific amount of stuff at the right restaurant management software cover all of our costs to ingredient... … food cost is using this free downloadable food cost formula and give you steps! Should monitor all dishes that come back to the price edit the and!
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