This document discusses cost control in the restaurant industry. It defines different types of costs including food, beverage, labor, and overhead costs. It explains how to classify costs as variable, semi-variable, or fixed. The document outlines steps to control food costs such as purchasing, receiving, storage, and production. It provides formulas to calculate food cost percentage and standard portion costs. Additional topics covered include forecasting, operating budgets, profit and loss reports, scheduling, and establishing quality standards.
The document discusses inventory control for foods in a foodservice organization. It describes how inventory control is important for planning orders, tracking food usage, and controlling costs. It outlines procedures for tracking inventory, including using spreadsheets, requisition forms, and perpetual versus physical inventory systems. Key aspects of inventory control covered are receiving, issuing, storage, record keeping, and tools to analyze inventory like ABC analysis and economic order quantity. Maintaining accurate inventory records is important for effective management of a foodservice operation.
Food cost control is a system used in hospitality businesses like hotels and restaurants to regulate costs and ensure they align with financial objectives. It focuses on controlling the largest cost element - food costs. The objectives of food cost control are to analyze income and expenses by department, set menu prices based on costs, prevent waste and inefficiencies, and provide management reports. Implementing an effective food cost control system involves three phases - setting basic financial policies, implementing operational controls around the catering cycle, and post-operational controls to analyze results. Food cost control faces obstacles like unpredictable demand, perishable goods, daily menu variations, short operational cycles, and high departmentalization in larger businesses.
This presentation discusses kitchen cost control. It emphasizes establishing standard recipes and portion control to maximize profits through minimizing food costs and waste. Standard recipes specify exact ingredients and methods to ensure consistency, while portion control regulates serving sizes. Together, these practices allow for accurate costing and pricing of menu items to maintain competitive prices. The presentation outlines various cost control methods for purchasing, receiving, production, labor, and equipment usage.
The document discusses standard recipes, costing, and profit calculations for food and beverage management. It explains that standard recipes specify ingredients and preparation to ensure consistency. Costing includes food costs, labor, overhead, and profit percentages. An example shows a restaurant with 8000 in food sales, 3520 in food costs, and a 13% net profit percentage. It emphasizes the importance of accurate food costing, stock control, and developing an effective control system tailored to each restaurant.
1) Key item management is an effective way to manage food costs without a large time investment. It involves identifying top spending items, examining their specifications, and managing prices paid through negotiation or bid pricing.
2) Operators should complete a yield analysis for key items used in recipes or prepped, and manage profit margins for menu items containing key items.
3) Comparing actual versus ideal key item usage identifies operational issues, like improper training or changed specifications, which can be addressed to reduce variances.
Cost control involves minimizing costs without sacrificing quality for customers. A budget forecasts revenue, expenses, and profit over periods like 28 days. If actual results vary significantly from the budget, management must define problems, determine causes, and take corrective action. Precise sales forecasts allow for accurate expense and staffing estimates, increasing operational efficiency and profitability.
Food and Beverage control Assignment.docxMasreshaA
This document discusses food and beverage control procedures for hotels and restaurants. It covers the controlling procedures for purchasing, receiving, storing, producing, issuing and distributing food and beverage items. Specifically, it details the standard procedures for purchasing items through contracts, cash and carry, and from total suppliers. It also outlines the key reasons for and process of receiving food deliveries according to the established specifications and standards. This ensures the correct quantities, qualities and prices of delivered items.
This chapter discusses restaurant operations. It describes the front of house, back of house, and office areas. The front of house deals directly with guests, while the back of house handles receiving, storing, food production and cost control. The chapter also covers forecasting demand, increasing sales, reducing costs, and trends like more flavorful foods and increased takeout/home meal replacement. Key aspects of operations include purchasing, receiving, storing inventory, and ensuring proper portion and cost controls.
The document discusses inventory control for foods in a foodservice organization. It describes how inventory control is important for planning orders, tracking food usage, and controlling costs. It outlines procedures for tracking inventory, including using spreadsheets, requisition forms, and perpetual versus physical inventory systems. Key aspects of inventory control covered are receiving, issuing, storage, record keeping, and tools to analyze inventory like ABC analysis and economic order quantity. Maintaining accurate inventory records is important for effective management of a foodservice operation.
Food cost control is a system used in hospitality businesses like hotels and restaurants to regulate costs and ensure they align with financial objectives. It focuses on controlling the largest cost element - food costs. The objectives of food cost control are to analyze income and expenses by department, set menu prices based on costs, prevent waste and inefficiencies, and provide management reports. Implementing an effective food cost control system involves three phases - setting basic financial policies, implementing operational controls around the catering cycle, and post-operational controls to analyze results. Food cost control faces obstacles like unpredictable demand, perishable goods, daily menu variations, short operational cycles, and high departmentalization in larger businesses.
This presentation discusses kitchen cost control. It emphasizes establishing standard recipes and portion control to maximize profits through minimizing food costs and waste. Standard recipes specify exact ingredients and methods to ensure consistency, while portion control regulates serving sizes. Together, these practices allow for accurate costing and pricing of menu items to maintain competitive prices. The presentation outlines various cost control methods for purchasing, receiving, production, labor, and equipment usage.
The document discusses standard recipes, costing, and profit calculations for food and beverage management. It explains that standard recipes specify ingredients and preparation to ensure consistency. Costing includes food costs, labor, overhead, and profit percentages. An example shows a restaurant with 8000 in food sales, 3520 in food costs, and a 13% net profit percentage. It emphasizes the importance of accurate food costing, stock control, and developing an effective control system tailored to each restaurant.
1) Key item management is an effective way to manage food costs without a large time investment. It involves identifying top spending items, examining their specifications, and managing prices paid through negotiation or bid pricing.
2) Operators should complete a yield analysis for key items used in recipes or prepped, and manage profit margins for menu items containing key items.
3) Comparing actual versus ideal key item usage identifies operational issues, like improper training or changed specifications, which can be addressed to reduce variances.
Cost control involves minimizing costs without sacrificing quality for customers. A budget forecasts revenue, expenses, and profit over periods like 28 days. If actual results vary significantly from the budget, management must define problems, determine causes, and take corrective action. Precise sales forecasts allow for accurate expense and staffing estimates, increasing operational efficiency and profitability.
Food and Beverage control Assignment.docxMasreshaA
This document discusses food and beverage control procedures for hotels and restaurants. It covers the controlling procedures for purchasing, receiving, storing, producing, issuing and distributing food and beverage items. Specifically, it details the standard procedures for purchasing items through contracts, cash and carry, and from total suppliers. It also outlines the key reasons for and process of receiving food deliveries according to the established specifications and standards. This ensures the correct quantities, qualities and prices of delivered items.
This chapter discusses restaurant operations. It describes the front of house, back of house, and office areas. The front of house deals directly with guests, while the back of house handles receiving, storing, food production and cost control. The chapter also covers forecasting demand, increasing sales, reducing costs, and trends like more flavorful foods and increased takeout/home meal replacement. Key aspects of operations include purchasing, receiving, storing inventory, and ensuring proper portion and cost controls.
This document outlines key concepts around food and beverage cost control for hospitality managers. It discusses the manager's main roles of communication, cost/expense control, revenue enhancement, and forecasting. It then covers introducing cost control, including defining costs, types of costs, and control techniques. Specific techniques covered include establishing standards, procedures, training, budgets, and ensuring proper purchasing, production, recipes and portion sizes to control food costs. The overall goal of cost control is to help ensure profitability through regulating expenses.
TOPIC 2: Menu cost and Pricing StrategiesAkmal Hafiz
When planning menus, managers must consider guests and financial goals of the food service operation. After managers know standard product costs for food and beverage items, they know how much it should cost to produce each item.
14. Basic Hotel Accounting Cost Control #5 by Dino LeonandriDINOLEONANDRI
This document discusses different inventory costing methods for restaurants and hotels, including FIFO, LIFO, and weighted average cost. It recommends FIFO as the best method for industries with perishable inventory that has a short demand cycle, like restaurants. FIFO matches the actual flow of food used in kitchens from earliest to latest purchases. FIFO also minimizes costs during inflation by using older, lower-priced goods first. The document provides examples of how to calculate FIFO inventory costs and explains its advantages for restaurants.
Volume forecasting involves predicting future sales volumes in two stages: initial and final forecasts. The initial forecast is done weekly based on past sales, bookings, and trends. The final forecast is done the day before to account for latest developments and make adjustments. Forecasting helps minimize over/underproduction and control costs when used with standard recipes, menus, and portion sizes. It also aids in purchasing, availability of ingredients, and comparing actual vs predicted sales volumes.
This document provides an overview of food and beverage cost control. It discusses the food service industry and food and beverage control. The methodology of food and beverage control includes planning, operational, and post-operational phases. Key aspects of the operational phase are purchasing, receiving, storing, preparing, and selling foods and beverages. The post-operational phase involves cost reporting, measuring performance against standards, and taking corrective actions. Personnel management is also important for effective food and beverage control.
Unit 1. Introduction to Food and Beverage Control.pptxHannaViBPolido
This document provides an overview of food and beverage cost control. It discusses the importance of food and beverage control for managing costs and ensuring profitability. Key topics covered include the objectives of food and beverage control like analyzing income/expenditure, establishing standards, pricing, preventing waste and fraud, and providing management information. Common problems in food and beverage control are also outlined, such as the perishability of food products, unpredictability of business volume and menu preferences, and the fast cycle of food and beverage operations. The document aims to explain the methodology of food and beverage control and its critical role in managing costs.
This document discusses key concepts related to cost dynamics and budgetary control. It defines costs, revenues, and profits from the perspective of sellers and buyers. It also outlines the main elements of costs including material, labor, and overhead costs. The document then discusses budgets, including types (e.g. sales, production), characteristics, objectives, and essentials of effective budgetary control. Key factors that influence budget preparation are also highlighted.
Success methods you can put to use immediately for power and water use, better purchasing and product specifications, more accurate recipes, labour saving and waste control.
Principles and practices of f&b control by ms. prachi wani assistant prof...AISSMS
A Food and Beverage control may be defined as the guidelines and regulations of the costs and revenue of operating the catering activity in a food and beverage establishment. A control system covering the sale of all food and beverages is vital to accomplish maximum return. Know more in detail about Principles and Practices OF F&B Control by Ms. Prachi Wani, Assistant Professor at AISSMS College Of Hotel Management And Catering Technology, Pune.
This document summarizes standards and procedures for developing food and beverage cost controls. It discusses establishing separate standards for different outlets like restaurants and banquets. While more specific standards provide more useful information, they also require more time and effort to develop and monitor. An ideal system balances usefulness and workload. The document then outlines five standard cost tools: standard purchase specifications, standard recipes, standard yields, standard portion sizes, and standard portion costs. It provides details on how each tool is developed and used to maintain consistent quality, costs and portions.
This document discusses production control in the food service industry. It defines production as converting raw products into cooked meals and explains that production control consists of production planning and monitoring. Production planning involves establishing standards for volume forecasting, standard yields, recipes, and portion sizes. These standards help control food costs, ensure quality and uniformity, and reduce waste. The document provides details on how to determine standard yields, recipes, and portion sizes and why these standards are important.
Unit 1. Introduction to Food and Beverage Control.pptxHannaViBPolido
This document provides an overview of food and beverage cost control. It discusses the food service industry and the objectives of food and beverage control, which include analyzing income and expenditures, establishing and maintaining standards, pricing, preventing waste and fraud, and providing management information. The document also outlines some problems in food and beverage control, such as the perishability of food products, unpredictability of business volumes and menu item preferences. It provides background information on traditional approaches to cost control.
A complete guide on managing restaurant food costs Posist
Managing restaurant food costs is one of the major aspects of running a restaurant profitably. We have listed the important points that would keep your food costs under control
https://www.udemy.com/hotel-management-food-beverage-and-general-cost-control/?couponCode=INTERNAL
In Hospitality management, F&B and other general Cost are second largest cost in hospitality apart from labour cost.
in this hotel management cost control course you will learn the fundamental processes by which these cost can be controlled.
we will learn various
- PAR Setting process for general inventory
- How to Calculate kitchen food orders
- Butcher Test / Yield Tests
- Bar Spot Checks
- Various other control aspects related to hotel cost controls
This Course is designed for hotel cost controllers, finance staff, department heads to be able to understand how cost for hotels are managed.
Inflation accounting and environmental accounting are summarized as follows:
Inflation accounting adjusts financial statements to account for the effects of inflation or deflation, especially in countries with high inflation. It aims to present an accurate picture of a company's financial position and avoid overstating profits by reflecting expenses and revenues at current prices. There are several methods used, such as current purchasing power which adjusts figures based on a price index, and current cost accounting which shows assets at their current cost.
Environmental accounting tracks the costs of environmental conservation activities and the related benefits to help companies manage these costs, analyze their effectiveness, and disclose this information externally to stakeholders. It is part of an environmental information system that supports sustainable development
This document discusses logistics costing and various costing methods. It provides information on activity-based costing (ABC), including the basic components and stages of ABC. It also discusses mission-based costing, which identifies total costs of meeting customer service goals. The document is related to implementing an activity-based costing system for a European animal food producer to help management understand product costs and guide decision making.
Principles And Practices of F&B Control by Ms. Prachi Wani Assistant Profess...AISSMS
A Food and Beverage control may be defined as the guidelines and regulations of the costs and revenue of operating the catering activity in a food and beverage establishment. A control system covering the sale of all food and beverages is vital to accomplish maximum return. Know in detail about Principles and Practices OF F&B Control by Ms. Prachi Wani, Assistant Professor at AISSMS College Of Hotel Management And Catering Technology, Pune.
This document discusses perpetual inventory systems. It defines inventory and perpetual inventory systems, which continuously update inventory information as business is conducted. It outlines the advantages as not requiring inventory counts that close business and providing continuous updates. Disadvantages are increased costs for varied goods. Key functions are continuously recording receipts, issues, and stock to determine quantities and values without counting. Periodic systems only provide updates after scheduled inventories, while perpetual systems track inventory amounts throughout the period.
This document outlines key concepts around food and beverage cost control for hospitality managers. It discusses the manager's main roles of communication, cost/expense control, revenue enhancement, and forecasting. It then covers introducing cost control, including defining costs, types of costs, and control techniques. Specific techniques covered include establishing standards, procedures, training, budgets, and ensuring proper purchasing, production, recipes and portion sizes to control food costs. The overall goal of cost control is to help ensure profitability through regulating expenses.
TOPIC 2: Menu cost and Pricing StrategiesAkmal Hafiz
When planning menus, managers must consider guests and financial goals of the food service operation. After managers know standard product costs for food and beverage items, they know how much it should cost to produce each item.
14. Basic Hotel Accounting Cost Control #5 by Dino LeonandriDINOLEONANDRI
This document discusses different inventory costing methods for restaurants and hotels, including FIFO, LIFO, and weighted average cost. It recommends FIFO as the best method for industries with perishable inventory that has a short demand cycle, like restaurants. FIFO matches the actual flow of food used in kitchens from earliest to latest purchases. FIFO also minimizes costs during inflation by using older, lower-priced goods first. The document provides examples of how to calculate FIFO inventory costs and explains its advantages for restaurants.
Volume forecasting involves predicting future sales volumes in two stages: initial and final forecasts. The initial forecast is done weekly based on past sales, bookings, and trends. The final forecast is done the day before to account for latest developments and make adjustments. Forecasting helps minimize over/underproduction and control costs when used with standard recipes, menus, and portion sizes. It also aids in purchasing, availability of ingredients, and comparing actual vs predicted sales volumes.
This document provides an overview of food and beverage cost control. It discusses the food service industry and food and beverage control. The methodology of food and beverage control includes planning, operational, and post-operational phases. Key aspects of the operational phase are purchasing, receiving, storing, preparing, and selling foods and beverages. The post-operational phase involves cost reporting, measuring performance against standards, and taking corrective actions. Personnel management is also important for effective food and beverage control.
Unit 1. Introduction to Food and Beverage Control.pptxHannaViBPolido
This document provides an overview of food and beverage cost control. It discusses the importance of food and beverage control for managing costs and ensuring profitability. Key topics covered include the objectives of food and beverage control like analyzing income/expenditure, establishing standards, pricing, preventing waste and fraud, and providing management information. Common problems in food and beverage control are also outlined, such as the perishability of food products, unpredictability of business volume and menu preferences, and the fast cycle of food and beverage operations. The document aims to explain the methodology of food and beverage control and its critical role in managing costs.
This document discusses key concepts related to cost dynamics and budgetary control. It defines costs, revenues, and profits from the perspective of sellers and buyers. It also outlines the main elements of costs including material, labor, and overhead costs. The document then discusses budgets, including types (e.g. sales, production), characteristics, objectives, and essentials of effective budgetary control. Key factors that influence budget preparation are also highlighted.
Success methods you can put to use immediately for power and water use, better purchasing and product specifications, more accurate recipes, labour saving and waste control.
Principles and practices of f&b control by ms. prachi wani assistant prof...AISSMS
A Food and Beverage control may be defined as the guidelines and regulations of the costs and revenue of operating the catering activity in a food and beverage establishment. A control system covering the sale of all food and beverages is vital to accomplish maximum return. Know more in detail about Principles and Practices OF F&B Control by Ms. Prachi Wani, Assistant Professor at AISSMS College Of Hotel Management And Catering Technology, Pune.
This document summarizes standards and procedures for developing food and beverage cost controls. It discusses establishing separate standards for different outlets like restaurants and banquets. While more specific standards provide more useful information, they also require more time and effort to develop and monitor. An ideal system balances usefulness and workload. The document then outlines five standard cost tools: standard purchase specifications, standard recipes, standard yields, standard portion sizes, and standard portion costs. It provides details on how each tool is developed and used to maintain consistent quality, costs and portions.
This document discusses production control in the food service industry. It defines production as converting raw products into cooked meals and explains that production control consists of production planning and monitoring. Production planning involves establishing standards for volume forecasting, standard yields, recipes, and portion sizes. These standards help control food costs, ensure quality and uniformity, and reduce waste. The document provides details on how to determine standard yields, recipes, and portion sizes and why these standards are important.
Unit 1. Introduction to Food and Beverage Control.pptxHannaViBPolido
This document provides an overview of food and beverage cost control. It discusses the food service industry and the objectives of food and beverage control, which include analyzing income and expenditures, establishing and maintaining standards, pricing, preventing waste and fraud, and providing management information. The document also outlines some problems in food and beverage control, such as the perishability of food products, unpredictability of business volumes and menu item preferences. It provides background information on traditional approaches to cost control.
A complete guide on managing restaurant food costs Posist
Managing restaurant food costs is one of the major aspects of running a restaurant profitably. We have listed the important points that would keep your food costs under control
https://www.udemy.com/hotel-management-food-beverage-and-general-cost-control/?couponCode=INTERNAL
In Hospitality management, F&B and other general Cost are second largest cost in hospitality apart from labour cost.
in this hotel management cost control course you will learn the fundamental processes by which these cost can be controlled.
we will learn various
- PAR Setting process for general inventory
- How to Calculate kitchen food orders
- Butcher Test / Yield Tests
- Bar Spot Checks
- Various other control aspects related to hotel cost controls
This Course is designed for hotel cost controllers, finance staff, department heads to be able to understand how cost for hotels are managed.
Inflation accounting and environmental accounting are summarized as follows:
Inflation accounting adjusts financial statements to account for the effects of inflation or deflation, especially in countries with high inflation. It aims to present an accurate picture of a company's financial position and avoid overstating profits by reflecting expenses and revenues at current prices. There are several methods used, such as current purchasing power which adjusts figures based on a price index, and current cost accounting which shows assets at their current cost.
Environmental accounting tracks the costs of environmental conservation activities and the related benefits to help companies manage these costs, analyze their effectiveness, and disclose this information externally to stakeholders. It is part of an environmental information system that supports sustainable development
This document discusses logistics costing and various costing methods. It provides information on activity-based costing (ABC), including the basic components and stages of ABC. It also discusses mission-based costing, which identifies total costs of meeting customer service goals. The document is related to implementing an activity-based costing system for a European animal food producer to help management understand product costs and guide decision making.
Principles And Practices of F&B Control by Ms. Prachi Wani Assistant Profess...AISSMS
A Food and Beverage control may be defined as the guidelines and regulations of the costs and revenue of operating the catering activity in a food and beverage establishment. A control system covering the sale of all food and beverages is vital to accomplish maximum return. Know in detail about Principles and Practices OF F&B Control by Ms. Prachi Wani, Assistant Professor at AISSMS College Of Hotel Management And Catering Technology, Pune.
This document discusses perpetual inventory systems. It defines inventory and perpetual inventory systems, which continuously update inventory information as business is conducted. It outlines the advantages as not requiring inventory counts that close business and providing continuous updates. Disadvantages are increased costs for varied goods. Key functions are continuously recording receipts, issues, and stock to determine quantities and values without counting. Periodic systems only provide updates after scheduled inventories, while perpetual systems track inventory amounts throughout the period.
2. Cost Control Overview
Cost is the price an operation
pays out in the purchasing and
preparation of its products or the
providing of its service.
2
Cost control is a business’s efforts to manage how much
it spends.
3.1 Chapter 3 | Cost Control
Every business needs to make more money than it
spends in order to survive.
Its sales, or revenue, have to be higher than its costs.
Revenue is the income from sales before expenses, or
costs, are subtracted.
3. Types of Costs
A successful restaurant or foodservice operation
needs to manage and control many costs.
Four main categories of costs:
Food costs
Beverage costs
Labor costs
Overhead
3
3.1 Chapter 3 | Cost Control
4. Costs cont.
Controllable costs can change based on sales
Variable: go up and down as sales go up and
down (food cost) in direct proportion (more
business, buy more food inventory)
Semivariable: go up and down as sales go
up and down in indirect proportion; labor costs
(less business, must pay manager but can
have less waiters)
the operation has a certain amount of control
in how it spends on these aspects of the
operation.
4
5. Costs cont.
Non-controllable/fixed costs: needs to be paid
regardless of whether the operation is making or
losing money
overhead costs = lease, utilities, insurance
do not change based on the operation’s sales.
5
6. Operating Budgets
Forecast is a prediction of sales levels or costs that will
occur during a specific time period.
Steps of forecasting
Analyze sales history: what items were popular at
what time
Account for externalities: hurricane, hot weather
Predict sales volume: How busy will certain days be?
Predict sales mix: how will each menu item sell
Most forecasting techniques rely on having accurate
historical data
6
An operating budget is a financial plan for
a specific period of time (usually monthly)
3.1 Chapter 3 | Cost Control
7. Forecasting cont.
The most common foodservice revenue
forecasting techniques are based on the number
of customers and average sales per customer.
A sales history is a record of the number of
portions of every item sold on a menu.
Most operations can run historical sales and
production reports from their point-of-sale (POS)
systems.
7
8. Profit-and-Loss Report
A P&L shows whether an operation has made or lost
money during the time period covered by the report.
A P&L helps management determine areas where
adjustments must be made to bring business operations
in line with established financial goals.
For an operation to be profitable, sales must exceed
costs.
Net earning is listed on bottom of P&L statement
8
A profit-and-loss report (P&L) is sales and cost
information for a specific period of time.
P&L is also known as an income statement p. 157
3.1 Chapter 3 | Cost Control
9. Cost-Control Tools
Cost control measures:
Portioning menu items (food costs)
Time clocks/POS systems (labor costs)
Full-line supplier co.: one-stop shops that
provide equipment, food, and supplies have
software programs to help control costs
9
3.1 Chapter 3 | Cost Control
10. Steps in Controlling Food Costs
1. Purchasing
2. Receiving
3. Storage
4. Issuing
5. Preparation
6. Cooking (production)
7. Service (sale)
10
Food costs must be controlled during all seven
stages of the food flow process:
3.2 Chapter 3 | Cost Control
11. Determining Food Cost
Inventory: dollar value of a food product in storage and
can be expressed in terms of units, values, or both:
Opening inventory is the physical inventory at the
beginning of a given period.
The closing inventory is the inventory at the end of a
given period.
food cost formula:
(Opening inventory + Purchases = Total food available) –
Closing inventory = Total food cost
11
Food cost: actual dollar value of the food used by an
operation during a certain period (sold, given away, wasted,
spoiled, overportioned, etc.)
3.2 Chapter 3 | Cost Control
12. Determining Food
Cost Percentage
Food cost % formula
Total food cost ÷ Sales = Food cost %
Food cost is a variable cost: It should increase or
decrease in direct proportion to an increase or decrease
in sales
12
Total food cost percentage is the relationship between
sales and the cost of food to achieve those sales.
3.2 Chapter 3 | Cost Control
13. Establishing Standard
Portion Costs
Most every operation has standardized recipes that are
followed every time a menu item is prepared.
For every standardized recipe, an operation should
establish a standard portion cost, which is the exact
amount that one serving, or portion, of a food item
should cost when prepared according to the item’s
standardized recipe.
A recipe cost card is a tool used to calculate the
standard portion cost for a menu item (p. 169)
As with the standardized recipe, a recipe cost card
should exist for every multiple-ingredient item listed on
the menu (p. 169)
13
3.2 Chapter 3 | Cost Control
14. As-purchased versus
Edible-portion Costs
The as-purchased (AP) method is used to cost
an ingredient at the purchase price before any
trim or waste is taken into account.(p. 171)
The edible-portion (EP) method is used to cost
an ingredient after trimming and removing
waste, so that only the usable portion of the item
is reflected.
14
3.2 Chapter 3 | Cost Control
15. Recipe Yields
To convert a recipe, use the formula:
desired yield = conversion factor
original yield
When determining yield, take into account for
cooking loss of meats and some vegetables
(greens)
15
A recipe yield is the process of determining the
number of portions that a recipe produces.
3.2 Chapter 3 | Cost Control
16. Controlling Portion Sizes
Controlling portions is very important for a
restaurant to meet its standard food cost.
Tools that are essential for accurate portion
control include:
Scoops
Ladles
Serving spoons
Portion scales
Another mechanism for ensuring that portions
are the right size is to preportion any item that
can be preportioned before serving.
16
3.2 Chapter 3 | Cost Control
17. Monitoring Production
Volume and Cost
When restaurants produce too much, food cost goes up;
produce too little, and sales are lost.
A food production chart shows how much product
should be produced by the kitchen during a given meal
period.
A well-structured chart can ensure product quality, avoid
product shortages, and minimize waste
Sales history is critical in helping management forecast
how many portions of each menu item to produce on a
given day.
p. 177
17
3.2 Chapter 3 | Cost Control
18. Menu Pricing
The menu is the primary sales tool in most restaurant
There are a number of methods for menu pricing: (p.178)
A contribution margin is the portion of dollars that a
particular menu item contributes to overall profits.
1. Contribution margin method, an operation must
know the portion costs for each item sold.
2. Straight markup pricing method, multiply raw food
costs by a predetermined fraction.
3. Average check method, the total revenue is divided
by the number of seats, average seat turnover, and
days open in one year.
4. Food cost percentage is equal to the food cost
divided by food sales.
18
3.2 Chapter 3 | Cost Control
19. Budgeting Labor Costs
Labor is a semivariable, controllable cost. Labor
costs are tied to sales, but not directly.
Most operations have both full-time and part-
time staff.
Operations must be aware of the fluctuations in
their sales so as to have just the right amount of
staff on hand to handle customers efficiently,
19
3.3 Chapter 3 | Cost Control
20. Labor Cost Factors
Business volume: amount of sales an operation is doing
for a given time period, impacts labor costs.
Employee turnover: the number of employees hired to fill
one position in a year’s time.
Quality standards: specifications of the operation with
regard to products and service (employee skills will need to
be higher in fine dining vs. quick service)
A restaurant or foodservice operation must meet
operational standards. If an employee does not prepare a
product that meets the operation’s standards, the item must
be redone. This costs money, in terms of wasted product
and lost productivity (overcooked steaks, burnt fries)
20
3.3 Chapter 3 | Cost Control
21. Scheduling
A master schedule: shows the number of people
needed in each position to run the restaurant or
foodservice operation for a given time period. P. 190
To make the best estimates for a master schedule, it also
needs to consider current trends (economy,
unemployment)
A crew schedule is a chart that shows employees’
names and the days and times they are to work. P. 191
A contingency plan helps an operation remain efficient
and productive even during adverse conditions (power
outage, employee absences)
Cross-training employees
On-call employees
21
3.3 Chapter 3 | Cost Control
22. Quality Standards for
Purchasing and Receiving
Purchasing: choose a credible supplier
Receiving: receive only when operation is slow
Meat: 2 or 3 times a week
Dairy: at least 2X a week
Fish: fresh, daily; frozen fish, weekly
When receiving:
1. well lit area
2. Have a copy of purchase order on hand
3. Check delivery against both purchase order
and invoice (bill from vendor)
22
3.4 Chapter 3 | Cost Control
23. Quality Standards
for Storing
Monitor perishable food daily to preserve its
quality.
Rotate all products in storage following the FIFO
(first in, first out) system.
Check storage facilities:
Dry storage 50-70 degrees
Refrigerator: below 41 degrees
Freezer: 0 degrees
23
3.4 Chapter 3 | Cost Control
24. Quality Standards for Food
Production and Service
Standard-portion sizes, standardized recipes,
and standard-portion costs are all food-
production standards.
Managers should taste each item to be sure that
it meets quality standards
24
3.4 Chapter 3 | Cost Control
25. Quality Standards
for Inventory
Physical inventory means counting and
recording the number of each item in the
storeroom.
Closely monitor inventory to ensure that
products are ordered as they are needed.
Carefully monitoring inventory also helps ensure
that no product goes to waste. Minimizing waste
keeps costs down and sales up.
75% of all inventory shortages are due to
employee theft
25
3.4 Chapter 3 | Cost Control