ProStart Year 1 Chapter 12

1. ProStart Year 1 Chapter 12 Controlling Foodservice Costs

2. Ways to Express Revenue • Total Dollar sales • Total Dollar sales by category (beverage, seafood, steak, etc.) • Sales Price • Average dollar sales per customer, per server, and per seat • Quantity of items sold • Average number of items sold • Turnover

3. Cost Control consists of Four Basic Steps: • Create standards and standard operating procedures. • Train all employees to follow procedures. • Compare actual performance to standards. • Correct any changes.

4. Forecasting Foodservice Revenue • Factors to Consider: • Number of seats • Estimated turnover • Estimated average check • Number of days in the year that the operation will be open

5. The Average Cover Formula Total revenue/Total customers= Average cover Example: A restaurant had $69,112 in revenue and a total of 2,789 customers last month.

6. Answer $69,112/2,789 = Average Cover

7. The Cost/Volume/Profit Relationship (Fixed costs + 0)/(100% - Variable Cost Percentage)=Break-even point (Fixed costs + profit)/(100% - Variable Cost Percentage)=Revenue Level

8. The Three Goals of Sales Control Are: • To Sell Products • To Earn Revenue • To Make a profit

9. Customers Select Restaurants based on: • Location • Cleanliness • Menu items • Prices • Décor • Portion Sizes • Product Quality • Service

10. Indicate the formula that can be used to determine each sales item in the left column below: Average Sales 0.15xCheck subtotal Per Customer Standard Tip Total Dollar sales/ total number of covers Percentage of Tip/Check subtotal Check total

11. Answer Average Sales 0.15xCheck subtotal Per Customer Standard Tip Total Dollar sales/ total number of covers Percentage of Tip/Check subtotal Check total

12. Balancing a Cash Drawer The Formula: Gross receipts (all recorded money received) + Change in drawer - Cash Paid Out Actual Receipts A register reads $976.85 in gross receipts, contains $19.05 in change, and has paid out $23.66. What are the actual receipts?

13. Answer: $976.85 + $19.05 - $23.66 = $972.24

14. Taking Inventory of Inventory • Opening Inventory- Items on hand, first day of the month • Closing inventory- Total dollar value of food on hand, last day of the month • Book inventory- Stores purchased + Closing inventory for the preceding day – Stores issue • Average Inventory- (Opening inventory + Closing inventory) / 2

15. Determining Monthly Food Cost Opening inventory (items on hand, first day of the month) + Purchases (directs and stores) Total available for sale • Closing inventory (items on hand, last day of the month Cost of food sold

16. Determining Daily Food Cost Cost of directs (from the receiving clerk’s daily report) + Cost of stores (from requisitions and meat tags) + Transfers from other departments or units to the food department • Transfers from the kitchen to other areas Cost of food sold • Cost employee meals Daily food Cost

17. Determining Closing Book Inventory Valuation • Steps involved: • Begin with the closing inventory valuation for the preceding day. • Add any stores purchased. • Subtract any stores issued.

18. Inventory Turnover Formulas (Opening inventory + Closing inventory) / 2 = Average inventory Food cost for the month / Average food inventory= Inventory Turnover

19. Causes of High Food Cost • Improper purchasing • Inaccurate forecasting • Poor receiving procedures • Failure to follow standardized recipes • Poor production schedules • Lack of good selling and service • Improper selection of menu items

20. Focus on Standard Portions • Standard Portion Size- The fixed quantity served to a customer for a fixed selling price. • Standard Portion Cost- The dollar amount that a standard portion should cost. • Equation: Purchase price per unit / Number of portions per unit = Standard portion cost