CHAPTER 3 COST 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. ( ) 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? ( ) 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 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