CHAPTER 3COST CONTROL

What is revenue? (147)

• The income from sales before expenses

What is the definition of a cost? (147)

• The price an operation pays out in the purchasing and preparation of its products or the providing of its service.

What are the 4 main categories of costs? (147)

• Food costs• Beverage costs• Labor costs• Overhead costs

What is another name for a fixed cost? (148)

• Non-controllable cost

What are 2 examples of controllable costs? (149)

• Food cost• Hourly wage portion of labor cost

What is a fixed cost? (151)

• Costs that remain the same regardless of sales volume

What is an operating budget? (151)

• A financial plan for a specific period of time

What is a forecast? (152)

• A perdition of sales levels or costs that will occur during a specific time period

Forecasting revenue is usually determined by looking at what 2 things? (152)

• Historical data• Average sales per customer

How do you calculate the average sales per customer? (152)

• Total dollars divided by the total number of customers

What does the sales history show? (153)

• It is a record of the number of portions of every item sold on a menu

What is a production sheet? (153)

• It is a list of all of the menu items that are going to be prepared for a given date.

The number of times a menu item is sold during a particular time period is known as what? (153)

• Sales history

What is a profit and loss report? (156)

• A compilation od sales and cost information for a specific period of time

List the 7 stages of the flow of food process. (165-166)

• Purchasing• Receiving• Storage• Issuing• Preparation• Cooking• Service

What is the definition of food cost? (167)

• The actual dollar value of the food used by an operation during a certain period

How do you calculate food cost?

• (See page 167)

What is inventory? (167)

• This represents the dollar value of a food product in storage and can be expressed in terms of units, values or both

Define opening inventory. (167)

• The physical inventory at the beginning of a given period (such as the month of April)

Define closing inventory. (167)

• The physical inventory at the end of a given period.

What is the formula for calculating food cost percentage? (168)

• Total food cost / Sales = Food Cost Percentage

What are the 2 methods used to determine the cost of ingredients in a standard recipe? (170-171)

• As purchased• Edible portion

What is as-purchased method? (170)

• It is used to cost an ingredient at the purchase price before and trim or waste is taken into account.

What is the edible portion method? (171)

• It is used to cost an ingredient after trimming and removing waste so that only the usable portion of the item is reflected.

What is a food production chart? (176)

• It is a form that shows how much product should be produced by the kitchen during a given meal period.

What is a sales history used for? (176)

• It is critical in helping management forecast how many portions of each menu item to produce on a given day.

What is contribution margin? (178)

• The portion of dollars that a particular menu item contributes to overall profits.

How do you calculate contribution margin? What is the contribution margin if a menu item sells for 15.00 and has cost of

33% to make?

What is the straight markup method? (178)

• Multiply raw food costs by a predetermined fraction

What is the average check method? (178)

• The total revenue is divided by the number of seats, average seat turnover and days open in one year.

What 4 factors affect labor costs? (187)

• Business volume• Employee turnover• Quality standards• Operating standards

How do you calculate employee turnover? (189)

• It is the number of employees hired to fill one position in a year’s time

What is listed on a master schedule? (190)

• It lists no names. It just lists the positions and the number of employees in those positions.

What is a chart that shows the employee’s names and the days and times they are to work? (191)

• Crew Schedule

List 3 things a good staff contingency plan should include. (192)

• Cross training employees• Identifying shift leaders• Having on call employees

What is cross training? (192)

• Training employees to handle responsibilities in areas of the operation aside from their primary work responsibilities

Explain the process of having on call employees. (192)

• A certain number of employees must call their operation at a predetermined time to find out whether they have to work that day.

What is the best time for restaurants and foodservice operations to receive deliveries? (199)

• When the operation is slow

How often should fresh fish be delivered to an operation? (200)

• Daily

How often should meat be ordered and delivered to an operation? (200)

• At least 2 or 3 times a week

What is the document from a vendor that lists such details as items purchased, date of order, purchaser and sales price? (201)

• Invoice

What is another name for an invoice? (201)

• Bill

What does it mean to take a physical inventory? (204)

• To count and record the number of each item in the storeroom