Cost Control Objectives: What is the importance of cost control? How do you complete purchase orders? What do you do with food after it reaches the food service operation? How do you compute food costs? What are cost control measures & how do you perform them?

Management & Cost Control _____________ – controlling & directing in order to get a job done correctly & efficiently within the allotted time. Also refers to person(s) responsible for managing the food service operation. Each person has different responsibilities, but same goal – ___________________________. Financially successful businesses operate with strict _________________________________. Management must know what is to be ______________________________________________________________________. Work schedule planned with effort to increase productivity.

Cost Control System When establishing a cost control system, consider the _________________________. _____________ is responsible for cost control in a food service operation. Basic factors for successful program are: The __________. Purchasing, receiving, storing, issuing ingredients & supplies. ____________ control. Sales & service.

Labor Costs ___________ part of entire operation’s budget. Most large operations provide fringe benefits for full-time employees, part-time workers ___________ receive benefits. Labor costs include: Salaries _______________________________ Uniforms & meals _________________ Workers comp insurance ______________ (health, life, & disability insurance) Cost of labor is affected by how ____________ employees work (talking when supposed to be working, taking unnecessary sick days – waste of money & time). The fewer the employees, the ___________ labor costs will be.

Food Costs Include: _________________________________. Type of food, quality, & availability are factors that affect food costs. __________________ – figuring the cost of each ingredient used in a recipe. Standard portion cost worksheet for a dish lists the following: __________________ # of servings yielded ______________________ Purchase price per unit of each ingredient Cost of each ingredient ____________________________ Cost per serving Manager bases selling price of food by the recipe. (Example of precosting worksheet on page 64).

Pricing The price customer pays for meal covers: ______________________ Share of _____________ cost of food service establishment (labor, rent/mortgage, insurance, taxes, nonfood supplies) 1st step in menu pricing: determine _________________ (see Worksheet for Standard Dinner Cost, page 65) Most operations have food cost percentage level, meaning specific percentage of money taken in is spent to purchase food. ______________ – food cost percentage is high, luxury restaurant – lower. (See equation, page 65) Other factors to be considered: Prices must be in line with other operations that serve similar food & service. Not all foods give same amount of profit.

Quality Control Means ____________________________. Standards include: Using _________ ingredients. Using ____________ recipes. Following approved cooking procedures. ______________ of the correct size. Keeping prepared foods fresh & safe to eat. Using _____________ in other meals.

Purchasing Food Person responsible for buying food & other supplies is called a ___________________________. Must buy the ___________ at the right price. In a small business; the ____________ may do the buying. Larger operation, full time job, this person is part of the _______________________.

Steps in Purchasing Determine what is needed by __________________________. Determine ______________ needed for each item. Obtain ______________ from several vendors. Choose best vendor for each item. Order supplies. __________________ goods. Check _________________ to be sure it’s accurate. Complete all purchasing records

The Purchase Order _________________ (P.O.) – a form the buyer fills out telling what products should be delivered. Separate PO for each vendor. See example on page 68. When filling out a PO, each one is given a number & 2 copies are created with the following information: Item needed Quantity ________________ (size/type of container used in packaging). ___________________ of item Unit price per weight, measure, can, or package. Total price. _______________ of delivery.

Specifications ________________ – a definite statement of the standards expected for a particular product. Includes information on wholesomeness, quality, type/size of container, count per unit of weight, total weight of item ordered. This helps vendor deliver the right product.

Specification Card Cards give buyer ______________ needed to prepare purchase orders. __________________ – foods that are safe to eat. All food shipped between states must meet standards set by the ______________. Quality – USDA has 4 labels (shields) that appear on fresh & processed meats. See bottom of page 69 & page 70 for different grades. _______________ – buyer must specify the kind and size of container for each product ordered. See page 71 for “Common Can Sizes” chart.

Storing Food This is important to maintaining ______________________. _________________________ are in charge of the room where all supplies are kept. Receiving Procedures __________________, 1 copy of PO included in order. ________________ checks each item on PO against item on invoice. Item is damaged or missing, a note is made on PO & invoice. If items do not meet specifications, _____________ to vendor. Clerk signs/dates PO & invoice with pen. Items become _____________ – itemized list of food & supplies on hand.

Storage Procedures Stored in _________________ manner. _____________ items together. Odor causing foods (____________) should be stored away from odor absorbing foods (_______________). Use ___________ supplies first, ___________ items should be placed in the ________, old ones moved ______________ (stock rotation). Storage area must be _______, free from insects & other pests. Refrigerators need ________ cleaning, spills wiped up immediately. Heavy articles stored near ___________ shelves, ________________ up top. Storeroom should be ____________ when unattended.