Controlling Foodservice Costs ProStart Year 1 Chapter 12 Controlling Foodservice Costs

Ways to Express Revenue Total Dollar sales Total Dollar sales by category (beverage, seafood, steak, etc.) Sales Price Average dollar sales per customer, per server, and per seat Quantity of items sold Average number of items sold Turnover

Cost Control consists of Four Basic Steps: Create standards and standard operating procedures. Train all employees to follow procedures. Compare actual performance to standards. Correct any changes.

Forecasting Foodservice Revenue Factors to Consider: Number of seats Estimated turnover Estimated average check Number of days in the year that the operation will be open

The Average Cover Formula Total revenue/Total customers= Average cover Example: A restaurant had $69,112 in revenue and a total of 2,789 customers last month.

Answer $69,112/2,789 = Average Cover

The Cost/Volume/Profit Relationship (Fixed costs + 0)/(100% - Variable Cost Percentage)=Break-even point (Fixed costs + profit)/(100% - Variable Cost Percentage)=Revenue Level

The Three Goals of Sales Control Are: To Sell Products To Earn Revenue To Make a profit

Customers Select Restaurants based on: Location Cleanliness Menu items Prices Décor Portion Sizes Product Quality Service

Indicate the formula that can be used to determine each sales item in the left column below: Average Sales 0.15xCheck subtotal Per Customer Standard Tip Total Dollar sales/ total number of covers Percentage of Tip/Check subtotal Check total

Answer Average Sales 0.15xCheck subtotal Per Customer Standard Tip Total Dollar sales/ total number of covers Percentage of Tip/Check subtotal Check total

Balancing a Cash Drawer The Formula: Gross receipts (all recorded money received) + Change in drawer - Cash Paid Out Actual Receipts A register reads $976.85 in gross receipts, contains $19.05 in change, and has paid out $23.66. What are the actual receipts?

Answer: $976.85 + $19.05 - $23.66 = $972.24

Taking Inventory of Inventory Opening Inventory- Items on hand, first day of the month Closing inventory- Total dollar value of food on hand, last day of the month Book inventory- Stores purchased + Closing inventory for the preceding day – Stores issue Average Inventory- (Opening inventory + Closing inventory) / 2

Determining Monthly Food Cost Opening inventory (items on hand, first day of the month) + Purchases (directs and stores) Total available for sale Closing inventory (items on hand, last day of the month Cost of food sold

Determining Daily Food Cost Cost of directs (from the receiving clerk’s daily report) + Cost of stores (from requisitions and meat tags) + Transfers from other departments or units to the food department Transfers from the kitchen to other areas Cost of food sold Cost employee meals Daily food Cost

Determining Closing Book Inventory Valuation Steps involved: Begin with the closing inventory valuation for the preceding day. Add any stores purchased. Subtract any stores issued.

Inventory Turnover Formulas (Opening inventory + Closing inventory) / 2 = Average inventory Food cost for the month / Average food inventory= Inventory Turnover

Causes of High Food Cost Improper purchasing Inaccurate forecasting Poor receiving procedures Failure to follow standardized recipes Poor production schedules Lack of good selling and service Improper selection of menu items

Focus on Standard Portions Standard Portion Size- The fixed quantity served to a customer for a fixed selling price. Standard Portion Cost- The dollar amount that a standard portion should cost. Equation: Purchase price per unit / Number of portions per unit = Standard portion cost