Quiz 3 Cost control Flashcards
Revenue/Sales
is the
amount of dollars you take in.
Expenses
are the costs of the
items required to operate the
business
Profit
is the amount of
dollars that remain after all
expenses have been paid.
Revenue - Expenses = Profit
Revenue - Expenses =
Profit
4 main costs a food service manager must concern themselves with
- Food Costs
- Beverage Costs
- Labor Costs
- Overhead/Operational Costs
Food Cost
are the costs
associated with producing the
menu items. In most cases, food
costs will make up the largest or
second largest expense category
you must learn to manage
Beverage costs
are those related
to the sale of alcoholic beverages.
Alcoholic beverages accounted for
in the Beverage Costs category
include beer, wine, and liquor. It
may also include the costs of
ingredients necessary to produce
these drinks, such as cherries,
lemons, olives, limes, mixers like
carbonated beverages and juices,
and other items commonly used in
the production and service of
alcoholic beverages.
* Costs of a non-alcoholic nature are
considered an expense in the Food
Costs category.
Labor costs
include the cost of all
employees necessary to run the
business, including taxes and
benefits. In most operations,
labor costs are second only to
food costs in total dollars spent.
Overhead costs
include all
expenses that are neither food,
beverage nor labor, such as
utilities, rent, linen, paper
supplies, repair etc.
Fixed costs
are those that are normally unaffected by changes in sales volume.
Variable costs
are those that are clearly related to business volume. Directly variable
costs are those that are directly linked to volume of business, such that every
increase or decrease in volume brings a corresponding increase or decrease in cost
Semi variable costs
have both fixed and variable elements.
Controllable costs
are those that can be changed in the short term. Variable costs are normally
controllable
Noncontrollable costs
are those that cannot normally be changed in the short term. These are
usually fixed costs
Unit costs
may be food or beverage portions or units of work per dollar basis
* Example: dollars generated per seat in a restauran
