1. Controlling Foodservice Costs
ProStart Year 1 Chapter 12
Controlling Foodservice Costs

2. 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

3. 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.

4. 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

5. 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.

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

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

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

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

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

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

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

13. Answer:
$ $ $23.66 = $972.24

14. 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

15. 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

16. 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

17. 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.

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

19. 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

20. 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