Module 4 Flashcards
1
Q
It is in this stage of meeting labor costs % targets that the actual and projected costs are compared
A
Evaluation stage
2
Q
Ratio of one item’s profit contribution compared to the total profit contribution of all items sold within one menu category
A
Menu Profitability Analysis (Contribution Margin)
3
Q
Give the formula for food cost
A
Cost of Food Sold = Total Food Available (Opening Inventory + Purchase) Minus Closing Inventory
4
Q
Pertains to debts that will have to be paid off during the current fiscal period (<= 1 year)
A
Current liabilities
5
Q
Based on profitability and popularity, which items should continue promotions? Where are these located in the graph?
A
Star (upper right quadrant)
6
Q
Formula of selling price if item is sold as one dish
A
Selling Price = (RFC + % Hidden Loss) X Computed Mark-up
7
Q
Food and beverages are examples of what type of cost
A
food cost
8
Q
Based on popularity and profitability, what food item should be removed if it does not influence sales of other items? Which part of the graph is this on?
A
Dog (Lower left quadrant)
9
Q
Two parameters covered by job analyses
A
Job descriptions
Job specifications
10
Q
What tool is used in step 1: Collect accurate sales and cost data?
A
income statement
11
Q
Two types of liabilities
A
Current liabilities
Long term liabilities
12
Q
This reflects the demand for food items
A
Menu popularity analysis
13
Q
Considerations for Food Cost Control in Purchasing
A
- Implement the buying policies set by the management
- Choosing suppliers after comparing prices, specifications
- Purchasing from suppliers who are reliable and reputable
- Purchasing enough quantity that meets the production needs
- Establishment and proper use of specifications
- Following a good purchasing procedure
- Use of necessary forms
○ Purchase requisitions
○ Purchase order form
○ Specifications
○ Price list
○ Summary of purchase record
14
Q
2 types of costs based on control
A
controllable costs and non-controllable costs
15
Q
cost documented in financial records
A
historical cost
16
Q
What should a food service institution do with a plow horse food item?
A
consider increasing the price
17
Q
What are the balancing concerns in labor cost control?
A
Management
Employees and customers
18
Q
Cost control process (NRA-EF)
A
- Collect accurate sales and cost data
- Monitor and analyze sales and costs
- Take corrective action as
appropriate
19
Q
This is a part in the planning stage that pertains to indicators which facilitate effective monitoring of employee performance
A
Performance standards
20
Q
Type of cost which refers to all forms of pay & other rewards given to the employee
A
labor cost
21
Q
What are the control techniques that a manager may use?
A
- Establishment of standards
- Establishment of procedures
- Training of employees
- Observing and correcting employee
- Use of financial records
- Disciplining employees
- Preparing and following budgets
22
Q
This part of the planning stage is based on a clear idea of what the enterprise is
A
Positions that need to be filled
23
Q
This pertains to compensation that is given beyond obligation
A
Tips/Gratuities
24
Q
Considerations in Controlling Issuance and Inventory
A
- No item should be moved out of the storage area without necessary documentation (requisition and issuance sheet)
- Perform both perpetual and physical inventory of stocks with proper documentation
- Ensure that forms and computer files are accurate
25
What parameters should you consider in making management decisions?
- Preparation and service costs
- Restaurant’s image
- Customer’s expectations
- Other factors that may explain low popularity/low profitability of the items
26
cost per serving, per hourly work
unit cost
27
This pertains to the summary of the financial performance over a given interval of time
Income statement
28
Two types of costs associated with the evaluation stage on evaluating payroll cost in terms of standard labor costs
Actual Payroll Cost
Standard Labor Cost
29
This pertains to all forms of pay and other rewards given to employees
Compensation
30
What type of food items are best used with slotted spoon or spoodle as a dish-up tool?
Small pieces
31
Tells how much your business is worth and if you can still go on with it
Balance sheet
32
Costs over which the managements have little to no control such as insurance, mortgage, and license fees
non-controllable costs
33
Considerations for Food Cost Control in Storage, Inventory, and Issuance
1. Maintaining proper conditions in the dry and cold storage areas
2. Following a good storage, inventory, and issuance procedure
3. Practice control measures in storage
34
what data are included in step 1: Collect accurate sales and cost data?
1. Period
*Yearly & monthly: pre-operations planning
*Weekly & daily: purchasing & scheduling
*Daily & meal: scheduling & planning
2. Sources: POS or manual tabulation
35
Examples of operating and other expenses
Utilities, laundry and linen supplies, repairs, replacement and maintenance, printing, paper goods, office supplies, cleaning materials, garbage disposal, depreciation, rent, insurance and taxes
36
What actions are done in step 3: Take corrective action as appropriate?
corrective actions, reforecast
37
These are based on a labor cost% set by a certain type of operation and established based upon expected sales
Payroll budgets
38
What is the impact of small changes in step 3: Take corrective action as appropriate?
can become significant
losses
39
Give examples of direct compensation
• Salaries
• Wages
• Tips/Gratuities
• Bonus
• Commission
40
Quantitative method of evaluating the success of menu items
Menu engineering
41
Considerations in Food Cost Control for Food Production
● Forecast: determine quantity of items to be prepared (sales history, standardized recipe, meal census)
● Prepare a food production chart
● Supervise food production
42
Pertains to what you own, resources with economic value owned by an individual, firm or corporation
Assets
43
What type of food items are best used with scoop as a dish-up tool?
Semi-solid
44
4 parameters involved in the planning stage
1. Payroll budget
2. Positions that need to be filled
3. Schedule of employees
4. Productivity standards
45
What is the formula of an item’s profit contribution
Profit Contribution = [Selling Price - (Raw Food Cost + “Free Items”)] X Number of Orders Sold for a Menu Item
46
Formula for Labor Costs %
[(Sum of all payroll costs (current+deferred))/(sales in a given period)] X 100
47
Based on popularity and profitability, what food item should be evaluated on what makes it non-popular? Which part of the graph is this on?
Puzzle (lower right quadrant)
48
differentiate directly variable and semi-variable
variable cost - directly variable have direct proportion
semi variable cost (salary or wages) not in direct proportion
49
cost of food and labor in one period
total cost
50
Considerations in payroll budget
Menu pricing
Type of service system
Level of service offered
51
Considerations for Food Cost Control in Receiving
1. Following a good receiving procedure based on a sound method
2. Use of necessary forms
○ Invoices
○ Credit memorandum and discrepancy report
○ Price list
○ Specifications
○ Receiving records
52
What are the two pricing methods?
Conventional Method
Scientific Method
53
This pertains to compensation calculated as a percentage of sales
Commission
54
It is the prices of goods or services when they are consumed or rendered
Cost
55
This pertains to compensation that is based on an hourly rate of pay
Wages
56
Pertains to mortgages, bonds, and other debts that are being paid off gradually
Long term liabilities
57
Labor Cost Control Strategies
• Use of labor-saving devices
• Use of convenience foods
• Training and development of employees
• Effective scheduling
• Lower employee turnover
58
What are the two types of compensation
Current
Deferred
59
Define labor cost control
This pertains to a process used to direct, regulate, and restrain employees’ actions in order to obtain desired levels of performance at appropriate levels of cost
60
Pertains to what you owe others, debts, or obligations
Liabilities
61
Pertains to the cost when food is sold, given away, stolen or wasted
Incurred
62
Give examples of deferred compensation
• Pension benefits
• Social security
63
Evaluation stage is for?
evaluating payroll cost
64
This cost is most readily controlled and subject to the greatest fluctuation
Food cost
65
Which part of the planning stage includes organizational charts and job analysis
Positions that need to be filled
66
What are the two types of current compensation
Direct compensation
Indirect compensation
67
What is the formula of the selling price of combination menus
Selling Price = (Total RFCs + % Hidden Loss) x Computed Mark-up
, where Total RFCs is the sum of the RFC of each food item in the combination menu
68
What data are monitor and analyze for step 2: Monitor and analyze sales and cost?
* Actual sales & costs vs. budget, standards & historical
data
* Line item review
* Difference: amount or percentage
69
Two ideal characteristics of a menu
Popular and profitable
70
Cost control strategies for operating or other expenses
• Establishment of protocols
• Use of energy saving equipment
• Maximize use of equipment
• Use of convenience foods
71
Formula of actual payroll cost
Actual Payroll Cost = Total Hours X Hourly Wage Rate
72
What are the considerations in employee schedules during the planning stage
1. Types and numbers of employees needed at different levels of business volume
2. Standard work hours (no. of employee hours required to perform a given volume of work)
73
What variables comprise the total food available
Opening inventory and purchase
74
What type of food items are best used with ladle as a dish-up tool?
Liquid form
75
This is used to compute composite food cost percentage
Menu product mix
76
Utilities and mortgage are examples of what type of cost
overhead or operating cost
77
What are the 2 classifications of costs
relationship to sales volume & based on control
78
What percentage is usually allocated for hidden loss?
10%
79
This pertains to the sum of all individual items’ popularity
Total Sales Mix
80
Periods in identifying and controlling food cost
Daily, weekly, monthly basis
81
projection of what costs will be in the future
planned cost
82
Used by managers to regulate and guard against excessive cost
Cost Control
83
Costs that the management can directly control such as food and labor
controllable costs
84
Formula in evaluating payroll cost in terms of payroll cost percentage
(Total Payroll Cost/Total Gross Sales) X 100
85
What way is best to dish-up food sold by unit weight?
Pre-portioned
86
Method of menu evaluation or analysis to DETERMINE what menu items are popular and profitable
Menu engineering (Contribution analysis)
87
This record pertains to a statement of financial condition that considers the assets and liabilities
Balance sheets
88
These expenses take up 12-18% of departmental budget
Operating and other expenses
89
Give examples of indirect compensation
• Paid vacations
• Health benefits
• Life insurance
• Meals
• Accommodations
• Use of recreational facilities
• Use of company automobiles
90
What are the Food Cost Control Strategies
● Use of convenience foods
● Correct costing and effective pricing of recipes
● Forecasting
● Portion control
● Use of standardization recipes
91
Examples of an income statement
• Earnings, expenses and any gains or losses
• Considers: sales, cost of goods sold, and operating expenses
92
Two types of assets
Current assets
Fixed assets
93
How to make a menu popular and profitable
- effective pricing
- menu engineering techniques
94
Formula of Gross Profit
Gross profit = Income (sales) - cost of food sold
95
Formula of % Popularity/% Sales Mix/Product Mix
% Popularity or % Sales Mix or Product Mix = (Number of the item sold/Total number of items sold within a category) X 100%
96
This is a detailed analysis that shows quantities sold of each item, their selling price and standard portion cost
The table also includes the food cost%, total cost, and total sales
Menu Product Mix
97
Variances in food cost can be attributed to:
1. Non-compliance to standard recipe or portion sizes
2. Inaccurate calculation of allocation of stock requirements
3. Increases prices of ingredients without an increase in selling price
4. Unaccounted consumption or transaction (employee meal, promotion)
5. Inability of the kitchen to produce expected yield
6. Plenty of unsold left-over food
7. Errors in cost computation or unreliable data like out-dated prices
8. Raw materials purchased at high price
9. New employees not properly trained
10. Theft of product or cash from sales
11. Products issued without requisitions or transfers
12. Forgetting to record invoices and other figures from forms
13. Menu mix out of balance
98
Formula for net profit or loss
Net profit or loss = Income (sales) - (cost of food sold + labor, overhead and operating costs)
99
Cost that is unaffected by changes in sales & volume
fixed cost
100
This sheet equates to net worth
Balance sheets
101
This involves computing for popularity percentages
Menu popularity analysis
102
Formula of standard labor cost
Standard Work Hours X Hourly Wage Rate
103
Summary account used at the end of an accounting period to collect the balances of the nominal accounts so that the net profit or loss may be shown
Profit & Loss (P&L) Statement
104
It is the component of the foodservice system that regulates, directs, checks or modifies operations by using a set of standards
Cost Control
105
Lists the amounts of the company assets, liabilities, owner’s equity at the end of an accounting period
Balance sheet
106
Starting point of budget control
Menu planning
107
Reconciliation of actual food cost with budgeted food cost
Food cost report
108
What are the stages in meeting labor cost % targets
Planning stage
Implementation stage
Evaluation stage
109
Cost that is affected by changes in sales & volume
variable cost
110
Parameters to consider in the planning stage associated with performance standards
Quality
Productivity
Cost
Safety and sanitation
111
What record is most associated with controlling cost at post-operations
Basic Financial Records
112
What is the formula of % Profitability?
% Profitability (Contribution Margin) = One Item’s Profit Contribution/Total Category Contribution x 100%
113
food and labor cost less than or equal to 65%
prime cost
114
This compensation is received after the conclusion of employment
Back pays
115
This pertains to a fixed amount of compensation paid on a weekly, monthly, or annual basis
Salary
116
Other term for % popularity
% Sales Mix
Product Mix
117
This type of compensation also pertains to back pays
Deferred compensation
118
Operating cost is an example of what cost
fixed cost
119
“Aces in place” is associated mostly with which part of the planning stage
Employee schedules
120
Type of asset that could be turned into cash at a reasonably predictable value within a relatively short time period (<=1 year)
Current assets
121
Give me the formula for the food cost percentage
Food Cost/Sales X 100
122
This pertains to compensation over a regular salary or wages given as a reward for a specific job performance
Bonus
123
Type of asset that pertains to monetary value of the company’s plant, equipment, property, patents, & other items used on a continuous basis ; expected to provide benefit for more than 1 year
Fixed assets
124
2 types of relationship to sales volume cost
Fixed cost and variable cost
125
2 types of variable cost
directly variable and semi-variable
126
What are the tools used for dish-up?
- slotted spoon or spoodle
- ladle
- scoop
- per-portioned
127
Effective control measures for food cost
Menu, menu costing and pricing, standard operating procedures
128
3 types of cost
Food cost, labor cost, overhead or operating cost
129
Establishment of standards is present in this stage of meeting labor costs % targets
Planning stage
130
Considerations for Cost Control in Food Production/Service
● Monitoring portioning out/dish-up
● Food Mishap Report
● Menu Tally Sheets
131
Popularity analysis term involved with popularity percentages
Sales mix or product mix
132
What is the formula that selling prices are based on?
Computed Mark-up X (RFC + % Hidden Loss)
133
This stage of meeting labor cost % targets covers operations
Implementation stage
134
Formula of selling price if item is sold per serving portion
Selling Price = [(RFC + % Hidden Loss) X Computed Mark-up]/Number of Servings
135
Type of cost which refers to fixed or recurring expenses
overhead or operating cost
136
Rent and lease are examples of which cost in the classification of costs based on sales volume
Fixed cost
137
Costs that managers focus on
Variable cost and controllable cost
138
Formula of Loss
Loss = Variance X Price
