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# Monitoring food service operations ii daily food cost

## by Rajendra Nabar, Learning Facilitator at Ecole Hoteliere Lavasa on Aug 26, 2011

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## Monitoring food service operations ii daily food costPresentation Transcript

• Monitoring Food Service Operations II Daily Food Cost
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 1 / 26
Monday, April 11, 2011
• Recap of the Previous session
Describe the formula to find out the consumption of food per month.
Explain the four methods of evaluating closing stock.
Describe the nature of various adjustments.
List the features of inventory segregation and count.
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 2 / 26
Monday, April 11, 2011
• KCM of this session
Calculate food cost for any one day and for all the days to date in a period.
Calculate food cost percentage for any one day and for all the days to date in a period.
Prepare a daily report of food sales, food cost, and food cost percentage.
Determine book inventory value.
Explain the difference between book inventory and actual inventory
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 3 / 26
Monday, April 11, 2011
• Scope
Introduction.
Types of adjustments to Food Cost.
Calculating Daily Food Cost Cumulative Basis.
Book versus actual inventory comparison.
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 4 / 26
Monday, April 11, 2011
• Introduction
Daily food cost figures are encouraged because:
Length of time.
Constant vigil over cost.
Cumulative data available for comparative.
Variance of any form can be investigated instantly.
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 5 / 26
Monday, April 11, 2011
• Types of adjustments to Food Cost
Negative adjustments: Which are subtracted from the food issued.
Transfers from Bar to kitchen.
Liquor transfer from Bars.
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 6 / 26
Monday, April 11, 2011
Gratis to bars.
Promotion Expense.
Food to Bar(Directs)
Transfers to other units.
Grease sales.
Steward sales.
Cost of employee meals.
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 7 / 26
Monday, April 11, 2011
• Determining Daily Food Cost
Cost of directs (from the Receiving Clerk ’ s Daily Report)+   Cost of stores+   Adjustments that increase daily cost (transfers from bar to kitchen; transfers from other units)— Adjustments that decrease daily cost (transfers from the kitchen to the bar: food to bar (directs), gratis to bar, steward sales, promotion expense)=   Cost of food consumed— Cost of employee meals=   Daily cost of food sold
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 8 / 26
Monday, April 11, 2011
• BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 9 / 26
Monday, April 11, 2011
• Cost of food sold
Cost of directs                                             \$ 218.75+   Cost of stores                                             944.55+   Adjustments that increase daily cost             90.00— Adjustments that decrease daily cost            70.35=   Cost of food consumed                            1,182.95— Cost of employee meals                                99.65=   Daily cost of food sold                            \$1,083.30
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 10 / 26
Monday, April 11, 2011
• Calculating Food Cost Percent
Food cost
————— x 100 = Food cost %
Food sales
\$1,083.30
————  = .31608 x 100 = 31.608 %
\$3,427.35
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 11 / 26
Monday, April 11, 2011
• Calculating Daily Food Cost Cumulative Basis
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 12 / 26
Monday, April 11, 2011
• Week to date comparative of Food Cost
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 13 / 26
Monday, April 11, 2011
• Daily Cumulative Cost Record
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 14 / 26
Monday, April 11, 2011
• Daily Cumulative Cost Record
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 15 / 26
Monday, April 11, 2011
• Book versus actual inventory comparison
Opening inventory (closing inventory for the preceding month)
+ Purchases (total stores purchases for the period, as listed on receiving reports)
= Total available (total value of the stores
available for use during the period)
— Issues (total stores issues for the period, as listed on requisitions)
=   Closing book value of the stores inventory
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 16 / 26
Monday, April 11, 2011
• Book versus actual inventory comparison
Theoretically the book value should be equal to the actual physical value ascertained.
The difference is known as discrepancy.
Caused due to incorrect calculations.
Food Spoilage.
Theft.
Over issuing or under issuing.
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 17 / 26
Monday, April 11, 2011
• Book Value Versus actual Value
Opening Inventory                     \$ 9,010.00+   Purchases                            \$ 8,240.00— Issues                                   \$ 7,630.00=   Book Value                           \$ 9,620.00— Actual Value                          \$ 9,120.00=   Difference                             \$   500.00
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 18 / 26
Monday, April 11, 2011
• Book Value and Actual Value
The books value is also known as the book inventory is a complete set of closing set of balances purchases, issues based on records.
The actual Value or Actual inventory where the value of consumption of food is based on physical counts of both balances.
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 19 / 26
Monday, April 11, 2011
• Formula to calculate % difference
Difference between book value and actual value = %                    Total issues
500
———— = .0655 x 100 = 6.55%
7,630
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 20 / 26
Monday, April 11, 2011
• Inventory Turnover
Inventory turnover is defined as a way to measure how often a food inventory has been consumed and replenished during an accounting period.
Inventory Turnover.
Rate of inventory turnover
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 22 / 26
Monday, April 11, 2011
• Inventory Turnover
Example
Opening Inventory: \$ 2000.00
Closing Inventory: \$ 3000.00
Food Cost: \$ 4600.00
Total Inventory = Opening Inventory + Closing inventory
Average Inventory = Total Inventory
2
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 23 / 26
Monday, April 11, 2011
• Inventory Turnover
Inventory Turnover = Food Cost
Average Inventory
Hence Total inventory= \$ 5000 (\$2000+\$3000)
Average Inventory = \$ 2500 ( \$ 5000/2)
Inventory Turnover= 1.84 (\$ 4600/\$2500)
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 24 / 26
Monday, April 11, 2011
• Inventory Turnover
If the rate of inventory turnover is 1.84 in a month then in a year it would be:
1.84 x 12 = 22.08
BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II
Slide 25 / 26
Monday, April 11, 2011
• Questions
&