Edelstein Chapter 9: Fiscal Management in Foodservice Flashcards
As Purchased (AP)
The actual price paid for food.
Contribution Margin (CM)
Is the same as gross profit and CM is equal to sale price minus the variable cost.
Cost Plus Method
Prices are calculated for menu items based on the entire cost to produce the item; per portion costs for food, direct labor, operating expenses, fixed expenses, and profit.
Covers Per Labor Hour
Determined by dividing the total number of customers served by total number of hours worked.
Edible Portion (EP)
The portion of the food that can be eaten or yielding portion.
Factor Method
The raw food cost is multiplied by a predetermined factor that takes into account labor, supplies, and any projected profit margin.
Labor Cost Per Cover
Calculated by dividing total payroll by number of covers (customers or meals) during the period of the payroll.
Labor Cost Per Labor Hour
Calculated by dividing total payroll by total labor hours.
Menu Engineering
An evaluating tool used to determine how well a menu item is doing in foodservice business. It determines the menu mix and contribution margin for each product and compares them with an average menu mix or average contribution margin.
Menu Mix
The percent popularity of a menu item in comparison to other items sold with it.
Par Stock Level
The maximum amount of food item that should be in inventory at a time. It is the same as maximum inventory level.
Percent Food Cost Method
Figure reached by dividing the cost of a particular food by the cost of the total food bill.
Percent Popularity
Measures how popular a menu item is in comparison with other menu items sold with it.
Physical Inventory
An actual count of the inventory items and a paper record of them to determine the total cost of inventory, inventory turnover rate, cost of food sold, and percent food cost.
Prime Cost Method
The sum of food and labor costs is multiplied by a predetermined pricing factor that accounts for food and labor through separate percentages/
Reorder Point
Computation relating to the reorder point or economic order quantity is a concept that balances ordering frequencies of orders.
Safety Level
An additional amount of food allowed in inventory to safeguard against running out in the middle of the week or before the ordered food is received. Every operation can determine its safety level for its foods based on experience.
Sales Per Labor Hour
Determined by dividing the total sale by the number of total labor hours.
Variable Cost
The cost that goes up and down depending on the volume of sales.
Variable Rate (VR)
The ratio of variable cost to a dollar.
Contribution Rate (CR)
The ratio of the sum of fixed cost and profit to sales or the difference between one and variable rate.
