3. COST CENTERS
Cost Center Description
Inventory
[PI001]
Raw materials(veg/non-veg), processed food, liquor, dairy
products
Kitchen
[PK002]
Chief Chef, Chefs, Helpers, Bartender
Service
[SS001]
Managers, Waiters, Cleansing Staff, Assistant staff, Advance
Booking, Orders, Special Offers
Administration
[SA002]
Employee Welfare, Accounts, Ambience Maintenance,
Marketing, Security
Service
Area[SSA003]
Garden Area , AC Hall
4. DETAILED DESCRIPTION: COST CENTER
Cost Center Nature Purpose Activities
Inventory
[PI001]
•Recurring Type
of Expenses
•Dynamic in
nature
• Maintain
adequate stock
so as to meet all
needs without
over stock and
expiration.
• Reduce labor
incentive
procedures.
Procurement and
storage of raw
materials(veg/non-
veg), processed food,
liquor and dairy
products
Administratio
n
[SA002]
•Recurring type
of expenses
•Static in nature
• Ensure smooth
functioning of all
other
departments
• Maintain payroll
• Manage the
Accounts
Department
• Maintain the
ambience of the
hotel
• Cater to party
orders
• Promotional
5. COST ELEMENTS
Types Details
Primary Cost Elements Materials, Rent, Labor
Secondary Cost Elements • Maintenance Costs (e.g.
Laundry Expenses, Security
Expenses)
• Cleansing Labor
• Internal Orders Settlement
(Insurance, Electricity,
Advertising, Depreciation,
Telephone)
• IT Assessed Cost
6. STATISTICAL KEY FIGURES
Cost Element Statistical Key Figure
Rent Square meter or feet (for
administration, production,
storage)
Materials Kilograms, liters,
Telephone Calling units
Labor(Wages/Salary/Overtime) Man hours
Advertising Per square feet
Cleansing Labor Man hours
Insurance Square feet
Electricity Units Consumed
Maintenance Costs Per square feet
7. DISTRIBUTION CYCLE
Rent – Inventory, Kitchen, Service Area, Admin
Materials – Inventory, Kitchen, Services, Admin
Labor- Services, Kitchen, Inventory, Admin
Rent Expense
Rs.50,000 Distribution
SA002
– 50 sq.
ft.
Sending Cost
Center
Service
Area
44%
Kitchen
30%
Inventory
22%
Administra
tion
4%
Receiving Cost
Centers
PI001 –
150 sq.
ft.
PK002 -
200 sq. ft.
PI001 – 150
sq. ft.
SSA002-
50 sq. ft.
Primary
elements
8. ASSESSMENT CYCLE
Insurance + Rent- Inventory, Kitchen, Service Area
Labor + Cleansing Labor – Service Area, Kitchen, Inventory,
Services, Admin
Rent + Maintenance Cost – Inventory, Admin, Service Area
Rent Expense
Rs.50,000
Insurance
Expense
Rs.5,00,000
Sending Cost
Center
Service
Area
Kitchen
Inventory
Administra
tion
Receiving Cost
Centers
SSA003-
Rs.90,000
PK002 -
Rs.2,50,000
PI001 –
Rs.1,50,00
0
SA002 –
Rs.10,00
0
Assessment
Primary
and
Secondary
cost elements
9. SOFTWARE SYSTEM
Tally V9.0
Touch Screen Based Restaurant Billing Software -
Param Infotech
