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# Monitoring food service operations ii daily food cost

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### Monitoring food service operations ii daily food cost

1. 1. Monitoring Food Service Operations II Daily Food Cost<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 1 / 26<br />Monday, April 11, 2011<br />
2. 2. Recap of the Previous session<br />Describe the formula to find out the consumption of food per month.<br />Explain the four methods of evaluating closing stock.<br />Describe the nature of various adjustments.<br />List the features of inventory segregation and count.<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 2 / 26<br />Monday, April 11, 2011<br />
3. 3. KCM of this session<br />Calculate food cost for any one day and for all the days to date in a period.<br />Calculate food cost percentage for any one day and for all the days to date in a period.<br />Prepare a daily report of food sales, food cost, and food cost percentage.<br />Determine book inventory value.<br />Explain the difference between book inventory and actual inventory<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 3 / 26<br />Monday, April 11, 2011<br />
4. 4. Scope<br />Introduction.<br />Types of adjustments to Food Cost.<br />Calculating Daily Food Cost Cumulative Basis.<br />Book versus actual inventory comparison.<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 4 / 26<br />Monday, April 11, 2011<br />
5. 5. Introduction<br />Daily food cost figures are encouraged because:<br />Length of time.<br />Constant vigil over cost.<br />Cumulative data available for comparative.<br />Variance of any form can be investigated instantly.<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 5 / 26<br />Monday, April 11, 2011<br />
6. 6. Types of adjustments to Food Cost<br />Positive adjustments: Which add up to the cost of food issued.<br />Negative adjustments: Which are subtracted from the food issued.<br />Positive adjustments:<br />Transfers from Bar to kitchen.<br />Liquor transfer from Bars.<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 6 / 26<br />Monday, April 11, 2011<br />
7. 7. Negative Adjustments<br />Gratis to bars.<br />Promotion Expense.<br />Food to Bar(Directs)<br />Transfers to other units.<br />Grease sales.<br />Steward sales.<br />Cost of employee meals.<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 7 / 26<br />Monday, April 11, 2011<br />
8. 8. Determining Daily Food Cost<br />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<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 8 / 26<br />Monday, April 11, 2011<br />
9. 9. BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 9 / 26<br />Monday, April 11, 2011<br />
10. 10. Cost of food sold<br />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<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 10 / 26<br />Monday, April 11, 2011<br />
11. 11. Calculating Food Cost Percent<br />Food cost<br />————— x 100 = Food cost %<br /> Food sales<br />\$1,083.30<br />————  = .31608 x 100 = 31.608 %<br />\$3,427.35<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 11 / 26<br />Monday, April 11, 2011<br />
12. 12. Calculating Daily Food Cost Cumulative Basis<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 12 / 26<br />Monday, April 11, 2011<br />
13. 13. Week to date comparative of Food Cost<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 13 / 26<br />Monday, April 11, 2011<br />
14. 14. Daily Cumulative Cost Record<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 14 / 26<br />Monday, April 11, 2011<br />
15. 15. Daily Cumulative Cost Record<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 15 / 26<br />Monday, April 11, 2011<br />
16. 16. Book versus actual inventory comparison<br />Opening inventory (closing inventory for the preceding month)<br />+ Purchases (total stores purchases for the period, as listed on receiving reports)<br />= Total available (total value of the stores<br />available for use during the period)<br />— Issues (total stores issues for the period, as listed on requisitions)<br />=   Closing book value of the stores inventory<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 16 / 26<br />Monday, April 11, 2011<br />
17. 17. Book versus actual inventory comparison<br />Theoretically the book value should be equal to the actual physical value ascertained.<br />The difference is known as discrepancy.<br />Caused due to incorrect calculations.<br />Food Spoilage.<br />Theft.<br />Over issuing or under issuing.<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 17 / 26<br />Monday, April 11, 2011<br />
18. 18. Book Value Versus actual Value<br />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<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 18 / 26<br />Monday, April 11, 2011<br />
19. 19. Book Value and Actual Value<br />The books value is also known as the book inventory is a complete set of closing set of balances purchases, issues based on records.<br />The actual Value or Actual inventory where the value of consumption of food is based on physical counts of both balances.<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 19 / 26<br />Monday, April 11, 2011<br />
20. 20. Formula to calculate % difference <br />Difference between book value and actual value = %                    Total issues<br />500<br />———— = .0655 x 100 = 6.55%<br />7,630<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 20 / 26<br />Monday, April 11, 2011<br />
21. 21.
22. 22. Inventory Turnover<br />Inventory turnover is defined as a way to measure how often a food inventory has been consumed and replenished during an accounting period.<br />Inventory Turnover.<br />Rate of inventory turnover<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 22 / 26<br />Monday, April 11, 2011<br />
23. 23. Inventory Turnover<br />Example<br />Opening Inventory: \$ 2000.00<br />Closing Inventory: \$ 3000.00<br />Food Cost: \$ 4600.00<br />Total Inventory = Opening Inventory + Closing inventory<br />Average Inventory = Total Inventory<br /> 2<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 23 / 26<br />Monday, April 11, 2011<br />
24. 24. Inventory Turnover<br />Inventory Turnover = Food Cost<br /> Average Inventory<br />Hence Total inventory= \$ 5000 (\$2000+\$3000)<br />Average Inventory = \$ 2500 ( \$ 5000/2)<br />Inventory Turnover= 1.84 (\$ 4600/\$2500)<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 24 / 26<br />Monday, April 11, 2011<br />
25. 25. Inventory Turnover<br />If the rate of inventory turnover is 1.84 in a month then in a year it would be:<br />1.84 x 12 = 22.08<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 25 / 26<br />Monday, April 11, 2011<br />
26. 26. Questions<br />&<br />Comments<br />BAC-4131 Food and Beverage Management Cost Control: Monitoring Food Service Operations -II<br />Slide 26 / 26<br />Monday, April 11, 2011<br />