Quiz 3 Cost Control Flashcards
The amount of dollars you take in is called
Revenue / Sales
Costs required to operate the business
Expenses
Dollar amount left over after all expenses have been paid
Profit
Profit formula
Revenue-Expenses = Profit
4 main costs that a food service manager must concern themselves with
- Food costs
- Beverage costs
- Labor costs
- Overhead / Operational costs
are the costs
associated with producing the
menu items.
Food costs
- usually the largest of second largest expense
- include drinks other than alcoholic!! like soda/fountain drinks
Costs of all alcoholic drinks (beer, wine, liquor) and anything needed to make them (such as mixers, lemons, cherries, juices)
Beverage costs
include the cost of all
employees necessary to run the
business, including taxes and
benefits.
Labor Costs
- usually secondary to food costs
include all
expenses that are neither food,
beverage nor labor, such as
utilities, rent, linen, paper
supplies, repair etc
Overhead costs/ Operational costs
Costs that do not change with change in sales
Fixed costs
example- rent
Costs that are directly related to business volume
Variable Costs
Costs that have both fixed and variable elements
semi-variable costs
Costs that can be changed in the short term
Controllable Costs
Costs that can not be changed in the short term
Noncontrollable Costs
may be food or beverage portions or units of work per dollar basis
Unit costs
The overall or total costs of one specific type of cost
Total cost
ex- total of labor costs for one period
Monetary terms
Include total sales
- items/assets that can be converted to cash easily
Monetary terms can be expressed as:
- By category ( food or beverage or labor)
- By server
- By seat ( total sales divided by number of seats)
Other monetary terms include
Sales price
- Average sale per customer (the result
of dividing total dollar sales by the
number of sales or customers)
- Average sales per server
Non monetary terms
Do not really have a price set on them- yet is an amount
Non-monetary term examples
Total items sold (such as steaks sold)
Patients/Residents
- Covers (Total covers refers to the total number
of customers served in each period.)
- Seat turnover (the number of seats
occupied during a given period divided
by the number of seats)
- Sales mix (a term that describes the
relative quantity sold of any menu item
compared to other items in the same
category).
Best way to strengthen controls?
Cut costs
Examples of “cost leaks” in food service
- Trays provided for discharged
or deceased patients - Nourishments not served
- Nourishments served with
meals - Residents not fed
- Overproduction of food
- Poor portion control
List specific ways to strengthen controls regarding employees and labor
- Make sure everyone is dressed appropriately
- What are the rules for clocking in and out?
- Are employees arguing?
- How to cut down time for cumbersome tasks
- Ensure no employee is stealing product
- Monitor breaks, absences, and tardiness
- What is the employee turnover rate?
- What can be done in downtime?
K.I.S.S meaning
Keep it simple, stupid
for menus
When should you replace the food?
When >50% of the item is returned for >25% of the residents.
Regular vs Therapeutic diets
Regular is less expensive
Therapeutic is 50% more expensive
Reasons to liberalize diets
- Dietary Compliance
– Poor taste = not eating = malnutrition
– Malnutrition will kill faster than a disease - Improved Psycho-Social status
- Improved appearance and taste of food
- Enhanced nutrient intake
- Increased accuracy of tray `line
– The more specialty items, the more errors - Improved blood sugars
– Reduces the urge to cheat - Better survey results
Reasons to change the menu frequently
Necessary for
long term care
“Odd” number
cycle length to
avoid the same
food every third
Monday, etc.
Have different
cycles for
Spring/Summer
and Fall/Winter
Failure to
change menus
leads to menu
fatigue and
malnutrition
Food for profit examples
- meals on wheels
- vending
- home meal replacement
- meals sent to day care centers
- catering
How to save money in purchasing, receiving, and preparation?
Have a menu
* Standardized Recipes
* Portion Control
* Have an ordering procedure
* Chose the right quality and quantity
Do you have and use food
specs?
* Do you have a properly trained
person to receive?
* Are prices checked?
* Is food rotated properly?
* Is a lot of food thrown away
due to over ordering?
Examples of adequate small ware to get the job done efficiently
hotel pan
scales
thermometers
pot holder
Food Prep and Service
- Are meats cooked to proper temperatures?
- Are standardized recipes used?
- Is portion control monitored?
- Are small portion requests honored?
- Does production follow the census?
- Is a nourishment used when a fluid would do?
- Are missed meals reported in a timely manner to avoid
unneeded trays? - Have food alternatives to laxatives been tried?
Components of food and beverage cost calculations
beginning inventory
closing inventory
credits and transfers
purchases
Cost analysis methods
COGS
Labor, food, or beverage cost %
