We do custom cakes...none are kept in the case. About half of the cakes are multi-tiered fondant cakes with GP elements (bows, flowers, baby shoes, etc) and the other half are relatively simple cakes done in buttercream.
My question is ~ what % of our cake cost should be labor? Right now we are running at about 50% but I know that should be lower. I was told that the standard is 20% in general business, but was wondering if that number is different for cakes.
Thanks! 
I don't know about making cakes strictly. I was watching a YouTube video where someone was talking to three bakery owners from the midwest. One of the owners said that his percentage of labor costs was 40%. He owned three bakeries.
I really think the percentage of labor would totally depend on the type of business and the cost of the business.
For instance...if I made all my fondant from scratch, cake from scratch, icing from scratch, and decorations from scratch, my labor is going to be alot more than if I pre-buy fondant, pre-buy icing, and pre-buy gumpaste flowers, etc.
In the first example, supplies will cost less but labor is more. In the second example, supplies will cost more but labor will be less.
So I don't think there can be a for sure percentage on labor.. also because the speed of working varies so widely. If I do a cake in 5 hours and someone else makes the same cake in 8 hours, I'm getting a larger percentage of labor profit than the other person.
Maybe I'm wrong but wouldn't it be based off how long it takes and how much the employee (or yourself) get paid more than it would a percentage?
Maybe I'm wrong but wouldn't it be based off how long it takes and how much the employee (or yourself) get paid more than it would a percentage?
with standardized production, there is a rule of thumb on how much each expense "should" be.
For example, in my catering quotes, I always allocated 10% of the total for labor costs. This told me that on a $4000 quote, I could "allow" $400 for labor/payroll. At $10/hour, this means I could have 40 hours worth of labor. I could use 5 people for 8 hours or 8 people for 5 hours and be within budget (and I usually came in under budget because we had it all set up assembly-line process ...... no wasted minutes on my watch! 
If you know that labor is "usually" 20% of your cake price, then a cake for $500 means you can allow $100 for labor. At $10/hour, this means you can use 10 hours of manpower to make this cake.
It's a budgeting tool so you don't have to sit and figure it out every single solitary time you have a new project and it helps you with staff scheduling. Total weekly orders of $2000 with a 20% labor budget at $10/hour means you can schedule employees to work a grand total of 40 hours. ($2000 x .20 = $400 divided by $10/hour = 40 hours)
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