Monitoring food service operations iii actual & std costs

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Monitoring food service operations iii actual & std costs

  1. 1. Monitoring food service operations III-Actual V/S standard Costs<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 1 /18 <br />Thursday, April 14, 2011<br />
  2. 2. Recap of Daily food cost<br />Define actual inventory value.<br />Define book inventory value.<br />Food cost percent today.<br />Food cost percent to date.<br />Gratis to bar.<br />Promotion expense.<br />Transfers from Bar to kitchen.<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 2 /18 <br />Thursday, April 14, 2011<br />
  3. 3. KCM of the Session<br />Define standard cost and explain how it is calculated.<br />List three ways an undesirable forecasted food cost percentage could be changed.<br />Define potential savings and list several conditions that affect it.<br />Distinguish between daily and periodic calculation of standard cost and potential savings.<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 3 /18 <br />Thursday, April 14, 2011<br />
  4. 4. Scope<br />Comparing actual costs and standard costs.<br />Menu Pre-Cost and Abstract.<br />Comparing forecasted sales & cost with actual sales and cost.<br />Comparing Actual with Standard Food Costs, Food Sales, and Potential Savings.<br />Example.<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 4 /18 <br />Thursday, April 14, 2011<br />
  5. 5. Comparing actual costs and standard costs<br />In general, there are two methods for comparing actual and standard costs.<br />Daily method of calculating actual costs and comparing it with standard costs.<br />Offers immediate results.<br />Time consuming.<br />Results are accurate.<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 5 /18 <br />Thursday, April 14, 2011<br />
  6. 6. Comparing actual costs and standard costs<br />Periodic Method of calculating actual cost with standard costs.<br />Less time consuming than the daily method.<br />Information not available readily.<br />Corrective action cannot be taken immediately because the expense has been made.<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 6 /18 <br />Thursday, April 14, 2011<br />
  7. 7. Menu Pre-Cost and Abstract<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 7 /18 <br />Thursday, April 14, 2011<br />
  8. 8. Menu Pre-Cost and Abstract<br />The pre-cost abstract is a sheet based on the standard cost.<br />It contains sales on one side and the food cost percentage in the other column.<br />It may also be referred to as the daily food cost percentage.<br />Another column is usually added which is known as forecast.<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 8 /18 <br />Thursday, April 14, 2011<br />
  9. 9. Menu Pre-Cost and Abstract with Forecast<br />The forecast is of sales.<br />The approximated sales are supported by an equivalent projection of cost and its percentage.<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 9 /18 <br />Thursday, April 14, 2011<br />
  10. 10. Volume Forecast and sales Forecast<br />A projection of the sales volume <br />In Terms of Units as forecast<br />Compared with actual units sold.<br />Difference or variance to projection.<br />The volume forecast is multiplied with the cost price and later the sales price which becomes sales forecast.<br />The Sales forecast is compared with actual sales to get a forecast variance<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 10 /18 <br />Thursday, April 14, 2011<br />
  11. 11.
  12. 12. Actual and Standard Food Costs, Food Sales, and Potential Savings<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 12 /18 <br />Thursday, April 14, 2011<br />
  13. 13. Example<br />Luvin the owner of Red Lobster Inn has developed a new menu for the use of his establishment. Each menu item represents a complete meal. He has calculated standard cost of each item and has kept careful records of sales for the month of March as shown below:<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 13 /18 <br />Thursday, April 14, 2011<br />
  14. 14. Example<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 14 /18 <br />Thursday, April 14, 2011<br />
  15. 15. Example<br />Food sales for March totaled $ 50, 028.50<br />Using the following information provided, calculate the total standard cost for the period.<br />In the next page are the figures from the accounting records of the Red Lobster <br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 15 /18 <br />Thursday, April 14, 2011<br />
  16. 16. Example<br />Opening Inventory $ 7414.80<br />Closing Inventory $ 6327.35<br />Food Purchases $ 17642.80<br />Transfers Beverage to Food $ 443.00<br />Transfers food to Beverage $ 837.00<br />Calculate the cost of food sold for the month.<br />Using the information from the previous question calculate each of the following:<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 16 /18 <br />Thursday, April 14, 2011<br />
  17. 17. Example<br />Actual cost percent.<br />Standard cost percent.<br />Potential savings in dollars.<br />Potential savings as percentage of sales.<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 17 /18 <br />Thursday, April 14, 2011<br />
  18. 18. Questions<br />&<br />Comments<br />BAC-4131 Food and Beverage Management Cost Control::Monitoring food service operations III Actual V/S Standard costs<br />Slide 18 /18 <br />Thursday, April 14, 2011<br />

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