Professional Documents
Culture Documents
CHAPTER 1
COST AND SALES CONCEPTS
DHM
INTRODUCTION
Successful restaurant personnel, including chefs, restaurant managers,
food and beverage controllers, dining room managers, and stewards have
the ability to keep costs at predetermined levels. They understand that
successful operations require that costs be carefully established and
monitored so that profit will result.
Food, beverage, and labor costs generally represent between 60% and
70% of the total costs of a restaurant operation. If these costs are not
carefully established and monitored, they can gradually increase until
profit is eliminated and losses are sustained.
Learning Objectives
1. Define the terms cost and sales .
2. Define and provide an example of the following types of costs: fixed,
directly variable, semi variable, controllable, non controllable, unit, total,
prime, historical, and planned.
3. Provide several examples illustrating monetary and nonmonetary sales
concepts.
4. Describe the significance of cost - to - sales relationships and identify
several cost - to - sales ratios important in food and beverage
management.
5. Identify the formulas used to compute cost percent and sales price.
6. Describe factors that cause industry wide variations in cost
percentages.
7. Explain the value of comparing current cost - to - sales ratios with
those
for previous periods.
3
Cost Concepts
Accountants define a cost as a reduction in the value of an
asset for the purpose of securing benefit or gains.
In F&B Business cost is defined as the expense to a hotel or
restaurant of goods or service when the goods are consumed
or the service rendered.
Food and beverage are Consumed when they are used,
wastefully or otherwise, and are no longer available for the
purpose which they were acquired.(Units: weight, volume or
total value)
The cost of labor is incurred when people are on duty, whether
or not they are working and whether they are paid at the end
of the shift or at some later date. (Hourly or weekly or
monthly)
4
Cost Concept
Fixed Cost (FC) and Variable Cost (VC) are used to
distinguished between those cost that have no direct
relationship to business and those that do.
Fixed Cost are those that are normally unaffected by changes
in sales volume. Such as = real estate taxes, insurance
premiums, depreciation, repairs and maintenance, rent or
occupancy cost, most utility cost, advertisement, professional
services.
The term fixed should never taken to mean static or unchanging
but merely to indicate that any changes that may occur in such
cost are related only indirectly or distantly to changes in
business volume.
Cost Concept
Variable Cost are those that are clearly related to business
volume. As business volume increase, variable cost will increase
and vice versa.
Food & Beverage cost are considered directly variable cost.
Direct Variable Cost are those that are directly linked to
volume of business increase and decrease of volume
correspondingly.
Payroll Cost includes salaries and wages and employee
benefits and often referred as Labor Cost.
Because labor cost consist of fixed and variable element it is
known as semi-variable cost, meaning a portion should change
in short-term and the other portion remains unchanged.
Cost Concept
CONTROLLABLE AND NON-CONTROLLABLE COST
Controllable cost are those that can be change in the
short term such as Direct Variable Cost, Wages,
Advertising & Promotion, Utilities, Repairs &
Maintenance and Administration and General
Expenses.
Non-Controllable cost are those that cannot normally be
changed in short-term such as fixed cost like Rent, Interest
on a mortgage, Real estate taxes, License fee and
Depreciation.
Cost Concept
Unit Cost may be food & beverage portion as in the cost of
one item or hourly unit of work. In F&B business unit cost
are commonly in average unit cost rather then actual
unit cost.
Total Cost are the total of food & beverage portions served
in one period such as a week or a month or total cost of
labor for one period.
Cost Concept
Prime Cost is a term used in the Hotel Industry refer to the cost
of materials and labor. (Food, Beverage and Payroll)
Historical and Planned Costs
Historical cost are all cost are historical - that is, that they can
be found in business records, book of account, financial
statements, invoices, employees time card and other similar
records. It is used for establishing unit cost, determining menu
prices and comparing present with past labor cost.
It will be used for planning and determining the future to develop
planned costs - projections of what cost will be or should be for
a future period. It is often called as Budgeting.
10
Sales Concept
Sales Defined
In general, the term sales is defined as revenue resulting
from the exchange for a products (Food & Beverage) and
service (Waiter) for value ($$).
The sales concept in F&B operation usually can be express
as: monetary and non-monetary.
11
Monetary Terms
Total Sales is a term that refers to the total volume of
expressed in dollar term for instant any given period , such as a
week, a month or a year.
By Category. Total dollar volume of sales by category are
total food sales or total beverage sales. Or total steak sales or
seafood sales.
By Server. This is total dollar volume of sales for which a
given server has been responsible in a given period. This is to
help the management to make judgment on employees
performance.
By Seat. Usually for a year period. Total Dollar sales divided
by the number of seats in the restaurant.
12
Monetary Terms
Sales Price refers to the amount charged each customer
purchasing one unit of a particular item. It can be a single meal or
entire meal.
Average Sale in business is determine by adding individual sales
to determine a total and then dividing that total by the number of
individual sales. Two types of commonly calculated averages are:
average sale per customer and average sale per server.
Per Customer is the result of dividing total dollar sales by the
number of sales or customer.
Per Server is total dollar sales for an individual server divided
by number of customer served by that individual.
13
Average Sale
This average is determined as follows:
Non-Monetary Terms
Total Number Sold refers to the total number of menu item sold
in a given time period.
Cover is the term used to describe one diner regardless of the
quantity of good the person consumes.
Total Cover refer to the total number of customer served in a
given period. Help to make judgment & comparisons
Average Covers is determined y dividing the total number of cover
for a given period by some other number such as hour of operation,
day of operation or numbers of server.
1.Cover per Hour = Total Covers / No. of Hours of Op.
2.Covers per Day = Total Covers / No. of Days of Op.
3.Covers per Server = Total Covers / No. of Servers
15
Non-Monetary Terms
Seat Turnover or simply turnover refer to the number of seats
occupied during a given period (or number of cover) divided by the
number of seats available.
140 customers served during that one Saturday meal.
The restaurant has 75 seats, so seat turnover would be calculated
as follows:
Seat turnover = Number of customers served Number
of seats
=
140 75
=
1.87 turns
16
Non-Monetary Terms
Sales Mix is a term used to describe the relative quantity sold
of any menu item compared to other items in the same
category.
Sales Mix For the Sugar & Spice Restaurant
August 20xx
Menu Item
Strip steak
Ginger shrimp
Lamb chop
Vege buritto
Chicken chop
Totals
100.0%
19
20
TUTORIAL
1. Given the following information, calculate cost percentages. Round
your answers to the nearest tenth of a percent.
a. Cost, $200.00; Sales, $500.00
b. Cost, $150.00; Sales, $500.00
c. Cost, $178.50; Sales, $700.00
d. Cost, $216.80; Sales, $800.00
2. Calculate cost, given the following figures for cost percent and sales:
a. Cost percent, 28.0%; Sales, $500.00
b. Cost percent, 34.5%; Sales, $2,400.00
c. Cost percent, 24.8%; Sales, $225.00
d. Cost percent, 31.6%; Sales, $1,065.00
3. Calculate sales, given the following figures for cost percent and cost:
a. Cost percent, 30.0%; Cost, $90.00
b. Cost percent, 25.0%; Cost, $500.00
c. Cost percent, 33.3%; Cost, $1,000.00
d. Cost percent, 27.3%; Cost, $1,300.40
22
TUTORIAL
4. Sales records for a luncheon in the Zalikas Restaurant for a recent week
were: Given this information, calculate the sales mix.
Item A, 196
Item B, 72
Item C, 142
Item D, 24
Item E, 112
Item F, 224
Item G, 162
5. Calculate the average check from the following data:
a. Sales, $1,000.00; Number of customers, 125
b. Sales, $1,300.00; Number of customers, 158
c. Sales, $8,720.53; Number of customers, 976
23
TUTORIAL
6. The following table indicates the number of covers served and the gross
sales per server for one three - hour period in Asyikins Restaurant.
Determine: (a) the average number of covers served per hour per
server
(b) the average sale per server for the three - hour period.
Server
Covers Served
Gross Sales Per Server
Fadhli
71
$237.40
Azuan
66
$263.95
Nadia
58
$188.25
7. Use the information about Asyikins Restaurant identified in Question 6 to
complete the following:
a. Calculate the average check.
b. Calculate the turnover for the three - hour period if there are 65 seats
in the restaurant.
24
26
27
29
30
31
32
36
37
38
39
40
Golden Dragon Restaurant Statement of Income for the year Ended December 20XX
SALES
RM
% of Sales
Food
786,250
85.0%
Beverage
138,750
15.0%
925,000
100.0%
Food
275,187
35.0%
Beverage
34,688
25.0%
309,875
33.5%
GROSS PROFIT
615,125
66.5%
185,000
20.0%
Employee Benefits
46,250
5.0%
138,750
15.0%
370,000
40.0%
245,125
26.5%
OCCUPANCY COST
78,625
8.5%
INTEREST EXPENSES
13,875
1.5%
DEPRECIATION
46,250
5.0%
106,375
11.5%
Total Sales
COST OF SALES
CONTROLLABLE EXPENSES
41
RESTAURANT PROFIT/LOSS
42
TUTORIALS
1. What is the purpose of cost control? Of sales control?
2. Define:
Flexible budget
Standard cost
Operating budget
Standard procedures
Procedures
Standards
Quality standards
Quantity standards
Training
Sales control
Budget
Control system
Control
Cost control
43
Control process
44
Cost/Volume/Profit Relationship
Introduction
The Key to understand cost/volume/profit relationship lies in
understanding that fixed costs exist in an operation regardless of
sale volume and that it is necessary to generate sufficient total
volume to cover both fixed and variable costs as well as desired
profit.
It should be apparent that relationship exist between and among
sales, cost of sales, cost of labor, cost of overhead and profit. In fact
these relationship can be expressed as follows:
Sales = Cost of sales + Cost of labor + cost of overhead +
profit.
46
Cost/Volume/Profit Relationship
The relationship formula
Because cost of sale is variable, cost of labor includes fixed and
variable elements and cost of overhead is fixed, one should restate
this equation as follows:
S = VC + FC + P
In fact this is the basic equation of cost/volume/profit analysis
S = Sales
VC = Variable Cost
FC = Fixed Cost
P = Profit.
47
Cost/Volume/Profit Relationship
Three guideline of references to remember
1. Within the normal range of business operations, there is a
relationship between variable costs and sales that remains
relatively constant. That relationship is a ratio that is normally
expressed either as a percentage or as a decimal point.
2. By Contrast, fixed costs tend to remain constant in dollar terms,
regardless of changes in dollar sales volume. Consequently,
whether expressed as a percentage or as decimal, the relationship
between fixed costs and sales changes as sales volume increase or
decrease.
3. Once acceptable levels are determined for costs, they must be
controlled if the operation is to be profitable.
48
96,678.00
Beverage
12,188.00
PAYROLL
81259.00
46,750.00
OCCUPANCY COST
29,500.00
INTEREST EXPENSES
5,000.00
DEPRECIATION
16,250.00
S=VC+FC+P
Step (1). Determine total variable cost
Total variable cost consists of food cost, beverage cost,
and the variable portion of labor cost. We will assume
that labor cost is $81259.00 40% variable and 60%
fixed.
Food Cost
Beverage Cost
Variable labor Cost (40%)
Total Variable Cost
50
$96,678.00
12,188.00
32,503.60
141,369.60
S=VC+FC+P
Step (2) Determine total fixed cost
Fixed labor Cost (60%)
$48,755.40
Other Controllable Exp.
46,750.00
Occupancy Cost
29,500.00
Interest
5,000.00
Depreciation
16,250.00
Total Fixed Cost
146,255.40
52
Breakeven Point
No business can be termed profitable until all of the fixed
cost have been met.
if sales cannot cover both variable cost & fixed cost it is
operating at a loss
if sales can cover both variable cost & fixed cost exactly
but insufficient to provide any profit.
(I.e, profit = 0) the business is said to be operating at the
breakeven point (BE)
54
Calculate CVP
Gather all the information that have been calculated
Sales
VC
FC
Profit
VR
CR
=
=
=
=
=
=
Sales =
325,000.00
141,375.00
146,250.00
37,375.00
.435
.565
or
S=
CR
Sales = 325,000
S=
FC + P
CR
Sales =
rounded as =
$146,250
+
0
Sales =
.565
$258,849.55
$258,850.00
At this level
VC is 43.5% of sales = 112,599.75 or 112,600.00
(S)$258,850 = (VC)$112,600 + (FC)$146,250 +(P)$0.00
56
Breakeven Analysis
The Graduate Restaurant achieved sales level of $325,000, which
was $66,150 beyond BE. At this level, beyond BE, there are no
more fixed cost to be cover for each dollar of sales but have
variable cost. Variable Cost can be determined by multiplying S
(Sales) by VR (Variable Rate) = .435
VC = S X VR
(VC) $28,775 = (S) $66,150 X (VR) .435
If $28,775 in VC is subtracted from sales of $66,150 the result
$37,375 is equal to profit (P). It consist of $0.565 of each dollar
sales beyond BE.
(P) $37,375 = (S) $66,160 x (CR) .565
57
Contribution Margin
Each dollar of sales, may also be divided in two portions.
1. That which must be used to cover variable cost associated with
the item sold.
2. That which remains to cover fixed costs and to provide profit.
The dollar amount remaining after VC have been subtracted from
the sales dollar is defined as the Contribution Margin (CM).
Contribution Margin must go to cover all fixed and variable cost
until breakeven is reached, after breakeven is reached,
contribution margin becomes profit.
Sales - Variable Cost = Contribution Margin
58
Cost/Volume/Profit Analysis
Certain assumptions that need to be understand in C.V.P
analysis are:
1. Cost is a particular establishment can be classified as fixed
and variable with reasonable accuracy.
2. Variable cost are directly variable
3. Fixed cost are relatively stable and will remain so within the
relevant range of business operations
4. Sales prices will remain constant for the period covered by
the analysis
5. The sales mix in the restaurant will also remain relatively
constant for the period.
59
CVP Analysis
The questions that we want to answer through CVP analysis are
likely to be:
What profit will be established earn at a given sales level?
What level of sale will be required to earn in given profit?
How many sales (or cover) will be required in order to reach the
breakeven point?
The question that con be sort into the different categories:
1. Those requiring answer stated in term of money
2. Those requiring answer stated in term of number of sales.
60
FC + P
S = 1 - VR (or CR)
This formula can also be use to determine BE by P = 0
Formula # 2
CR = FC + P/S
Formula # 3
P = (S X CR) FC
Formula # 4
FC = (S X CR) P
61
Food Costs
RM188,625
RM61,200
Occupancy Costs
RM55,500
Interest
RM20,025
Depreciation
RM33,750
Beverage Costs
RM 42,750
RM85,575
RM 76,500
70
71
72
73
74
75
Both delivery time and daily usage for the period must be used to
79
is 14 cans per week and it takes five days from date of order to get
delivery, then the basic number of cans needed is 10. However,
because delivery may be delayed, because usage may increase for
unforeseen reasons, or because both of those possibilities may
occur at once, it is advisable to increase that amount somewhat.
The amount of the increase is a matter for management to decide.
For our purposes, we will use 50 percent for all calculations. If that
were so in this case, the reorder point would be set at 15 cans.
Under the periodic method, the DEI would similarly be calculated as
15 cans.
Par stock
20
-Reorder point
15
=Subtotal
5
+Normal usage until delivery 10
=Reorder quantity
15
80
Non-Perishable normally with fewer suppliers with lowest price and consistent quality,
small quantity & delivery wise.
81
Centralized Purchasing
This is usually used in chain operations and occasionally established by small groups
of independent operator with similar needs/
Advantage.
Purchased at lowest price because of volume
Desired quality as agent has greater choice
Obtain exact specification
Larger inventory ensuring reliable supply
Dishonest greatly reduced.
Disadvantage
Little freedom for its particular needs
No advantage on local specials at reduce price
Limiting changes of menu.
82
83
Quantity
Unit
Description
Unit Price
Amount
30
biji
Durian
8.50
255.00
10
kg
Striploin
12.35
123.50
Received By:___________________
84
Date: ___________
No. 1
Date: June 11, xxxx
Purchase Journal Distribution
QTY
Unit
Description
Unit
Price
Amount
Total
Amount
Direct
Food
Food
Stores
lbs
Strip Steak
7.95
238.50
10
lbs
Breast of veal
4.65
46.50
285.00
285.00
25.00
25.00
Jongs Farm
10
kg
Crocodile Meat
2.50
25.00
89
Kg
Daun Kucai
5.00
5.00
Bdl
Pucuk Paku
2.00
4.00
319.00
9.00
9.00
319.00
9.00
310.00
Sundries
TUTORIALS
1. List 10 items considered perishable and 10 considered nonperishable in the
foodservice industry.
2. Nestor s Restaurant uses the periodic order method, placing orders
every two weeks. Determine the quantity of canned peaches to order
today, given the following:
a. Normal usage is one case of 24 cans per week.
b. Quantity on hand is 10 cans.
c. Desired ending inventory is 16 cans.
3. Harvey s Restaurant uses the periodic order method, ordering once a
month. Determine the proper quantity of tomato juice to order today,
given the following:
a. Normal usage is one case of 12 cans per week.
b. Quantity on hand is 6 cans.
c. Desired ending inventory is 18 cans.
d. The coming month is expected to be very busy, requiring 50 percent
more tomato juice than normal.
TUTORIALS
4. The Midtown Restaurant uses the perpetual order method. One of the
items to be ordered is canned pears. Determine reorder point and reorder
quantity, given the following:
a. Normal usage is 21 cans per week.
b. It takes four days to get delivery of the item.
c. Par stock is set at 42 cans.
d. Cans come packed 12 to a case.
5. The Last Chance Restaurant uses the perpetual order method. One of
the items in the inventory is canned green beans. Determine reorder
point and reorder quantity, given the following:
a. Normal usage is two cans per day.
b. It takes five days to get delivery of the item.
c. Par stock is 29 cans.
d. Cans come packed six to a case.
93
97
Factor 4: Security
Food should never be stored in a manner that permits
98
99
DIRECT
Direct are charge to food cost as they are received directly on
assumption that these perishable item have been purchased for
immediate use. Figures in FOOD DIRECT column in Receiving
Clerks Daily Report will be calculated directly into the particular
day food cost.
101
STORES
The food category known as stores was previously described as
consisting of staples. When purchased, these foods are
considered part of inventory until issued for use and are not
included in cost figures until they are issued. Therefore, it
follows that records of issues must be kept in order to determine
the cost of stores. For control purposes, a system must be
established to ensure that no stores are issued unless kitchen
personnel submit lists of the items and quantities needed.
102
103
Quantity
Description
Unit Cost
$2.79
$16.74
50
Lbs. Sugar
0.39
19.50
40
2.59
103.60
3.39
258.12
TOTAL
Charge to: FOOD Department
___________
Requested by
Total Cost
$397.96
105
units in a chain. The two examples that follow illustrate inter unit
transfers and the effect of such transfers on food costs. In some
instances, small chains produce some items (e.g., baked goods) in
only one unit and then distribute those items to other units in the
chain. If the ingredients for the baked goods come from that
particular unit s regular supplies, then some record must be
made of the cost of the ingredients used.
106
portion sizes. Among the more common are the aforementioned scoops
and slotted spoons, as well as ladles, portion scales, and measuring cups.
Even the number scale or dial on a slicing machine, designed to regulate
the thickness of slices, can aid in standardizing portion size: A manager
may stipulate a particular number of slices of an item on a sandwich and
then direct that the item be sliced with the dial at a particular setting
Standard Recipe
Another important production standard is the recipe. A recipe is a list of
portion should cost, given the standards and standard procedures for its
production. The standard portion cost for a given menu item can be
viewed as a budget for the production of one portion of that item. There
are several reasons for determining standard portion costs. The most
obvious is that one should have a reasonably clear idea of the cost of a
menu item before establishing a menu sales price for that item
113
1. Formula
For many (perhaps even for a majority) of the menu items prepared in
foodservice establishments, determining standard portion cost can be very
simple. For a large number of items, one may determine portion cost by means
of this formula:
Standard portion cost
=
=
3. Butcher test
When meat, fish, and poultry are purchased as wholesale cuts, the
purchaser pays the same price for every pound of the item
purchased, even though, after butchering, the resulting parts may
have entirely different values. If, for example, a particular cut of
beef is approximately half fat and half usable meat, the two parts
clearly have different uses and different values, even though they
were purchased at the same price per pound because both were
part of one
wholesale cut. Among other purposes, the butcher test is designed
to establish a rational value for the primary part of the wholesale
piece.
meat, poultry or fish that is available for portioning after any required
in-house processing has been completed.
Quantity = Number of portions X portion size (as a decimal) /Yield
percentage
Number of portions
=
Portion size =
Yield percentage
=
119
PROBLEMS
Assume that control has been established over individual portions
and will shift our focus to the number of portions produced for
each item on a menu for a given day or meal. After all, if the cost
of a portion of some item is controlled at, say, $ 4.50 per serving,
and the establishment produces 100 portions but sells only 40,
there will be 60 portions unsold. These may or may not be salable
on another day. Even if they are salable, these portions are likely
to be of lower quality than when they were first produced. It is
also possible that they cannot be sold in their original form, but
must be converted into some other item that will be sold at a
lower sales price. Sometimes, if none of these possibilities are
feasible, it may be necessary to throw the food away. In any case,
there is excessive cost either the cost of the food or the cost of
additional labor that would not have been required if the
establishment had produced 40 portions rather than 100. Such
excessive costs can be reduced or eliminated by applying the four
- step control process to the problem of quantity production.
122
Popularity Index
Popularity index is defined as the ratio of portion sales for a
given menu item to total portion sales for all menu items
The popularity index is calculated by dividing portion sales for
a given item by the total portion sales for all menu items and
then multiplying by 100 in order to convert to a percentage.
The index may be calculated for any time period, even for a
single meal. When calculated for a single meal, the index is
usually referred to as the sales mix,
Popularity index =
portion sales X 100
Total portion sales for all menu items
188
X100
1937
0.09706 and 0.09706 100 9.706%
1.
2.
3.
4.
5.
127
quantities of all menu item that are to be prepared for a given date.
It varies from one establishment to another.
Usually submitted to the Chef as many days earlier as possible.
Late adjustment can be made immediately before the forecasted date
or the night before. Usually minor adjustment.
128
Production Sheet
PRODUCTION SHEET
DAY : Tuesday
DATE : 7 Feb 20xx
MEAL : Dinner
VOLUME FORECAST: 305
Menu
item
129
Forecast
Adjusted
forecast
Portion
size
Production
Method
Portions
on Hand
Needed
Production
Total
Available
Left
over
75
80
6 oz.
Recipe#62
80
80
60
65
8 oz.
Recipe#4
60
65
20
20
4 oz.
Recipe#19
20
20
150
165
12 oz.
Grill
20
145
165
Total
305
330
Item
Sales Forecast
MEAL : Dinner
Actual Sales
Difference
80
85
+5
65
60
-5
20
20
-0-
165
159
-6
Total
330
324
-6
130
Void Sheet
VOID SHEET
DAY : Tuesday
Check #
Waiter #
Item
Authorization
Sales value
11031
SJC
7.95
11034
Dropped on floor
SJC
6.95
11206
SJC
7.95
11227
SJC
7.95
Void Sheet is to record all the sale that are not being done because of the reasons stated. The
return on each of the item must be authorized by the supervisor or the manager in charge.
131
steps. First, each menu item should be listed on the form before
kitchen production begins. Next, an inventory is taken of any
portions left over from previous meals that may be used again.
Reusing leftovers in this way is common in some establishments,
but unacceptable in others.
If leftovers are to be used, the number of portions on hand is
deducted from the quantity scheduled for production, and only the
difference is prepared. That number is written in the Portions
Prepared column.
132
Opening
Inventory
Portion
Prepared
Additional
Preparation
Total Available
Closing
Inventory
Portions consumed
AB
180
180
15
165
BH
60
65
60
CJ
110
120
14
106
DZ
20
145
165
157
10
SALES RECONCILIATION
Item
Portion Sold
Portion Void
Total
Consumed
(From Above)
AB
165
165
165
BH
58
60
60
CJ
103
104
106
DZ
156
157
157
Difference
Comment
2 missing check
Introduction
The monthly accounting procedures provides information that
135
1.
2.
3.
4.
5.
136
137
138
139
1.
2.
3.
4.
140
To get the proper Food Cost we also need to deduct the cost of
employees meals from the cost of food consumed
Cost of meals can be calculated in four ways
Cost of separate issues
Prescribed amount per meal per employee
Prescribed amount per period
Sales value multiplied by cost percent
141
Management Report
1. Frequency
2. Timelines
Inventory Turnover
1.
2.
3.
4.
5.
Food Cost
Average Inventory
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144
Food Cost
Food sales
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Food Inventory
Beverage to Food
Today
Today
Today
Purchases
Balance
Food Cost %
Meat
Directs
Food to Beverage
To Date
To Date
To Date
Issue
Total Sales
Store
Total Cost
Date
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Adjustment
Daily Report
The main purpose of daily report are
1. Shows food costs, food sales and food cost % for any one
specific day and for all the days to date in the period
2. Compares these figures to those for a similar period
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Description
Report to
Food Sales
Food Cost
Food Cost %
Today
Same Day
Management
Last Week
To Date
This Week
Last Week
$3,600
$745
20.7%
$2,000
$300
15.0%
$15,750
$4,990
31.7%
$12,600
$4,200
33.3%
$80
$665
$525
$140
$90
$210
$105
$105
$2,170
$2,800
$2,115
$685
$1,665
$2,495
$1,765
$820
Cost Breakdown
Direct
Store
Meat
Groceries
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Description
Today
Food Sales
Food Cost
Food Cost %
Item
This Week
Last Week
Item
This Week
Last Week
149
This Week
3,600
745
20.7%
Vegetable
This Week
Last Week
Item
REF:waq12
Beef
1,100
925
Dairy
575
450
Poultry
960
465
15,750
4,990
31.7%
Fruits
850
675
To Date
12,600
4,200
33.3%
Bakery
505
325
Provisi
ons
230
245
Cooking liquor
Total Direct
240
215
Other
95
80
2,170
1,665
Total Meat
2,115
1,675
Total Store
13.4%
13.3%
13.8%
13.2%
145
45
687
820
4.3%
6.5%
MENU ENGINEERING
AND ANALYSIS
A very useful technique for analyzing menu sales and
153
155
1.
2.
3.
4.
5.
6.
7.
8.
156
Location
Menu item differentiation
Price acceptability
Lighting and decor
Portion sizes
Product quality
Service standards
Menu diversity
Maximizing Profit
There are two principal means for maximizing profits:
1. Pricing products properly
Cost
Price Sensitivity
Factors to consider
Pricing Policies
percentage
3. Adding desired contribution margins to portion cost
157
Maximizing Profit
2. Selling those products effectively.
The menu
Sales Techniques
Up-selling
Menu knowledge
Costumer service
158
Controlling Revenue
159
Menu Analysis
Result definition
Star is a menu item that produce both high contribution margin and high
volume. These are the item that foodservice operators prefers to sell
when they can
Dog is a menu item that produces a comparatively low contribution
margin and accounts for relatively low volume. These are probably the
least desirable item to have on the menu.
Plowhorse is a menu item that produces a low contribution margin but
accounts for relatively high volume. These items have broad appeal to
customer, but contribution comparatively little profit per unit sold.
Puzzle is a menu item that produces a high contribution margin but
accounts for comparatively low sales volume.
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B
No. sold
(MM)
C
Menu
mix%
D
Item
food cost
E
Item
sales
price
F
Item CM
(E-D)
G
Menu
Cost
(D*B)
H
Menu
Rvenu
(E*B)
L
Menu CM
(F*B)
CM
CAT
MM
CAT
S
Menu
item
Classifi
Broil
Steak
Shrimp
Scrod
Lobster
Veal
Roast
Chops
Salisbur
N
COL
TOTAL
100%
K = I/J
161
O = M/N
managements specifications
To guard against excessive costs that can develop in the
production process
163
164
165
166
167
Controlling Revenue
Possible control of problems
Working with the cash drawer open
Under-ringing sales
Overcharging customer
Undercharging customer
Over pouring
Under pouring
Diluting bottle contents
Bringing ones own bottle into the bar
Charging for drinks not served
Drinking on the job
168
169
170