LESSON 1 - FIXED COST AND VARIABLE COST

Question 1

They are successful restaurant personnel who have the ability to keep costs at predetermined levels.

Answer 1

chefs, restaurant managers, food and beverage controllers, dining room managers, and stewards

Question 2

They understand that successful operations require that costs be carefully established and monitored so that profit will result.

Answer 2

chefs, restaurant managers, food and beverage controllers, dining room managers, and stewards

Question 3

Food, beverage, and labor costs generally represent between ** and ** of the total costs of a restaurant operation.

Answer 3

60% & 70%

Question 4

If these costs are not carefully established and monitored, —-

Answer 4

they can gradually increase until profit is eliminated and losses are sustained

Question 5

define a cost as a
reduction in the value of an asset for the
purpose of securing benefit or gains.

Answer 5

Accountants

Question 6

In F&B Business cost is defined as

Answer 6

the expense to a hotel or restaurant of goods
or service when the goods are consumed or
the service rendered

Question 7

Food and beverage are _____ 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)

Answer 7

Consumed

Question 8

The cost of labor is incurred when people are ____

Answer 8

on duty, whether or not they are working and whether they are paid at the end of the shift or at some later date.

Question 9

are used to distinguished between those cost that have no direct relationship to
business and those that do.

Answer 9

Fixed Cost (FC) and Variable Cost (VC)

Question 10

are those that are
normally unaffected by changes in sales
volume.

Answer 10

Fixed Cost

Question 11

Such as = real estate taxes, insurance premiums, depreciation, repairs and
maintenance, rent or occupancy cost, most
utility cost, advertisement, professional services

Answer 11

Fixed Cost

Question 12

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.

Answer 12

.

Question 13

** are those that are clearly related to business volume. As business volume increase, variable cost will increase and vice versa.

Answer 13

VARIABLE COST

Question 14

are considered directly variable cost.

Answer 14

FOOD AND BEVERAGE

Question 15

are those that are directly linked to volume of business increase and decrease of volume correspondingly.

Answer 15

Direct Variable Cost

Question 16

includes salaries and
wages and employee benefits and often referred as Labor Cost.

Answer 16

Payroll Cost

Question 17

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.

Answer 17

Controllable cost

Question 18

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.

Answer 18

Non-Controllable cost

Question 19

is a term used in the Hotel Industry refer to the cost of materials and labor. (Food, Beverage and Payroll)

Answer 19

Prime Cost

Question 20

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.

Answer 20

Historical cost

Question 21

It will be used for planning and
determining the future to develop **

Answer 21

PLANNED COST

Question 22

projections of what cost will be or should be for a future period. It is often called:

Answer 22

BUDGETING

Question 23

-Cost percentage vary considerably from one foodservice operation to other.

-This is due to many possible reasons. Basically
there are two types of foodservice operation. Those that operate at low profit
margin and depends on relatively high business volume.

Answer 23

Those that operate at relatively high profit margin thus does not require high business volume.

Question 24

In general, the term sales is defined as revenue resulting from the exchange for a products (Food & Beverage) and service
(Waiter) for value ($$).

Answer 24

SALES

Question 25

The sales concept in F&B operation usually can be express as:

Answer 25

MONETARY & NON-MONETARY

Question 26

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.

Answer 26

Total Sales

Question 27

Monetary Terms

Answer 27

by category
by server
by seat

Question 28

refers to the amount charged
each customer purchasing one unit of a particular item. It can be a single meal or entire meal.

Answer 28

Sales Price

Question 29

n business is determine by
adding individual sales to determine a total
and then dividing that total by the number of
individual sales.

Answer 29

Average Sale

Question 30

Two types of commonly
calculated averages are:

Answer 30

average sale per customer and average sale per server.