Published on September 25, 2015
1. DMC2523 MENU PLANNING AND COST CONTROL LAURA LAW - PERAK COLLEGE OFTECHNOLOGY
2. • Monthly inventory • Monthly food cost determination • Reports to management • Inventory training • Daily inventory • Daily food cost determination • Daily reports • Periodic Comparison LAURA LAW - PERAK COLLEGE OFTECHNOLOGY Handout Copy of Text Book
3. DMC2523 MENU PLANNING AND COST CONTROL LAURA LAW - PERAK COLLEGE OFTECHNOLOGY
4. 4 The monthly accounting procedures provides information that can be useful for assessing the various control procedures established for the operation. To make these determinations, it is necessary to take a number of steps aimed at measuring performance. The first step is the physical inventory
5. 5 There are at least five possible ways of assigning values to units of products in a physical inventory. 1. Actual Purchase Price Method 2. First-In First-Out Method (Latest Prices) 3. Weighted Average Purchase Price Method 4. Latest Purchase Price Method (Most Recent Price) 5. Last-In, First-Out Method (Earliest Prices)
6. Opening Inventory + Purchases = Total Available - Closing Inventory = Cost of Food Once the cost of food is known, food cost percent can be determined using the formula identified in the earlier chapter. 6
7. 7 Transfer • Intra-Unit (Cooking Liquor/Food to Bar-Direct) • Inter-Unit Grease Sales (Sales of Item Out to other buyers especially item such as fats or oil. Usually will be debited as Other Income – Salvage and Waste Sales) Steward Sales (Sales to employees may be done if permitted) Gratis To Bars (Light food to customer as gives away such as hors d’ oeuvres) Promotion Expenses (Entertainment Purposes)
8. 8 Opening Inventory + Purchases =Total Available for Sale -Closing Inventory =Cost of Food Issued + Cooking Liquor + Transfers from Other Units - Food to Bar (Directs) - Transfer to Other Units - Grease Sales - Steward Sales - Gratis to Bars - Promotion Expenses = Cost of Food Consumed Cost of Food Issued Cost of Food Consumed
9. 9 To get the proper Food Cost we also need to deduct the cost of employees’ meals from the cost of food consumed Cost of meals can be calculated in four ways 1. Cost of separate issues 2. Prescribed amount per meal per employee 3. Prescribed amount per period 4. Sales value multiplied by cost percent
10. 10 Opening Inventory + Purchases =Total Available for Sale -Closing Inventory =Cost of Food Issued + Cooking Liquor + Transfers from Other Units - Food to Bar (Directs) - Transfer to Other Units - Grease Sales - Steward Sales - Gratis to Bars - Promotion Expenses = Cost of Food Consumed - Cost of Employees’ Meal = Cost of FOOD SOLD Management Report 1.Frequency 2.Timelines
11. 11 Excessive Stock can brought about 1. Excessive Food Cost due to the spoilage of food stored too long 2. Excessive amount of cash tied up in inventory 3. Excessive labor cost to receive and store foods 4. Excessive space required for storage 5. Unwarranted opportunity for theft Total Inventory = Opening Inventory + Closing Inventory Average Inventory = Inventory Turnover = Total Inventory 2 Food Cost Average Inventory
12. DMC2523 MENU PLANNING AND COST CONTROL LAURA LAW - PERAK COLLEGE OFTECHNOLOGY
13. 13 The major problem of monthly food cost alone in the length of time between reports. It cannot reveal any problems promptly and corrective action also cannot be taken promptly To avoid this delay and to make more timely figures available on day-to-day operation basis, daily food cost calculation is required. This will help the management to identified any situation promptly and can act with the situation immediately without needing to wait until the end of the month. This may be too late already.
14. 14 Cost of direct (from the receiving clerk’s daily report) + Cost of store (from requisition and meat tags, depending on the procedures followed) + Adjustment that increase daily cost (transfers from bar to kitchen; transfers from other units) - Adjustments that decrease daily cost (transfer from the kitchen to the bar; food to bar (directs); gratis to bar; Steward sales; grease sales; promotion expenses) = Cost of food consumed - Cost of employees meals = Daily cost of food sold Food Cost Food sales = Food Cost % Food cost to date Food sales to date = Food cost % to date
15. 15 Date Directs Meat Store Adjustment Total Cost Total Sales Food Cost % Food Inventory Balance BeveragetoFood FoodtoBeverage Today ToDate Today ToDate Today ToDate Purchases Issue
16. 16 The main purpose of daily report are 1. Shows food costs, food sales and food cost % for any one specific day and for all the days to date in the period 2. Compares these figures to those for a similar period
17. Description Today Same Day Last Week To Date This Week Last Week Food Sales Food Cost Food Cost % Cost Breakdown Direct Store Meat Groceries $3,600 $745 20.7% $80 $665 $525 $140 $2,000 $300 15.0% $90 $210 $105 $105 $15,750 $4,990 31.7% $2,170 $2,800 $2,115 $685 $12,600 $4,200 33.3% $1,665 $2,495 $1,765 $820 17
18. Day: Saturday Date: OCT 20 20xx REF:waq12 Description Today This Week To Date Same Week, Last Month Food Sales Food Cost Food Cost % 3,600 745 20.7% 15,750 4,990 31.7% 12,600 4,200 33.3% Item Vegetable Fruits Dairy Bakery Total Direct This Week Last Week 850 675 575 450 505 325 240 215 2,170 1,665 13.8% 13.2% Item Beef Poultry Provisi ons Other Total Meat Total Store This Week Last Week 1,100 925 960 465 230 245 95 80 2,115 1,675 13.4% 13.3% 687 820 4.3% 6.5% Item Cooking liquor Food to bar (Directs) This Week Last Week 165 95 145 45 18
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