2015 DMC2523 Topic 7 cost and sales concept

67 %
33 %
Information about 2015 DMC2523 Topic 7 cost and sales concept

Published on September 25, 2015

Author: LauraLaw1028

Source: slideshare.net



3. 3 •Accountants define a cost as a reduction in the value of an asset for the purpose of securing benefit or gains. •In F&B Business cost is defined as the expense to a hotel or restaurant of goods or service when the goods are consumed or the service rendered. •Food and beverage are “Consumed” 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) •The cost of labor is incurred when people are on duty, whether or not they are working and whether they are paid at the end of the shift or at some later date. (Hourly or weekly or monthly)

4. 4 •Fixed Cost (FC) and Variable Cost (VC) are used to distinguished between those cost that have no direct relationship to business and those that do. •Fixed Cost are those that are normally unaffected by changes in sales volume. Such as = real estate taxes, insurance premiums, depreciation, repairs and maintenance, rent or occupancy cost, most utility cost, advertisement, professional services. 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.

5. 5 •Variable Cost are those that are clearly related to business volume. As business volume increase, variable cost will increase and vice versa. •Food & Beverage cost are considered directly variable cost. Direct Variable Cost are those that are directly linked to volume of business increase and decrease of volume correspondingly. •Payroll Cost includes salaries and wages and employee benefits and often referred as Labor Cost. Because labor cost consist of fixed and variable element it is known as semi-variable cost, meaning a portion should change in short-term and the other portion remains unchanged.

6. 6 CONTROLLABLE AND NON-CONTROLLABLE COST •Controllable cost 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. •Non-Controllable cost 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.

7. 7 •Unit Cost may be food & beverage portion as in the cost of one item or hourly unit of work. In F&B business unit cost are commonly in average unit cost rather then actual unit cost. •Total Cost are the total of food & beverage portions served in one period such as a week or a month or total cost of labor for one period.

8. 8 •Prime Cost is a term used in the Hotel Industry refer to the cost of materials and labor. (Food, Beverage and Payroll) •Historical and Planned Costs •Historical cost 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. •It will be used for planning and determining the future to develop planned costs - projections of what cost will be or should be for a future period. It is often called as Budgeting.

9. 9 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. • Those that operate at relatively high profit margin thus does not require high business volume.

10. 10 Sales Defined In general, the term sales is defined as revenue resulting from the exchange for a products (Food & Beverage) and service (Waiter) for value ($$). The sales concept in F&B operation usually can be express as: monetary and non-monetary.

11. 11 •Total Sales 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. By Category. Total dollar volume of sales by category are total food sales or total beverage sales. Or total steak sales or seafood sales. By Server. This is total dollar volume of sales for which a given server has been responsible in a given period. This is to help the management to make judgment on employees performance. By Seat. Usually for a year period. Total Dollar sales divided by the number of seats in the restaurant.

12. 12 •Sales Price refers to the amount charged each customer purchasing one unit of a particular item. It can be a single meal or entire meal. •Average Sale in business is determine by adding individual sales to determine a total and then dividing that total by the number of individual sales. Two types of commonly calculated averages are: average sale per customer and average sale per server. Per Customer is the result of dividing total dollar sales by the number of sales or customer. Per Server is total dollar sales for an individual server divided by number of customer served by that individual.

13.  This average is determined as follows: Average check = Total dollar sales ÷ Total number of covers Total sales of $3,902.30 and 140 covers. Thus, Average sale = $3,902.30 ÷ 140 = $27.87  Yasser, one of the servers, had 30 customers and total dollar sale of $565 on the Saturday night of February 13, average sale per server for Jim would be calculated as follows: Average sale = Total sales for Yasser ÷ No. of customers for Yasser = $565 ÷ 30 = $18.83

14. 14 •Total Number Sold refers to the total number of menu item sold in a given time period. •Cover is the term used to describe one diner regardless of the quantity of good the person consumes. •Total Cover refer to the total number of customer served in a given period. Help to make judgment & comparisons •Average Covers is determined y dividing the total number of cover for a given period by some other number such as hour of operation, day of operation or numbers of server. 1.Cover per Hour = Total Covers / No. of Hours of Op. 2.Covers per Day = Total Covers / No. of Days of Op. 3.Covers per Server = Total Covers / No. of Servers

15. 15 Seat Turnover or simply turnover refer to the number of seats occupied during a given period (or number of cover) divided by the number of seats available. 140 customers served during that one Saturday meal. The restaurant has 75 seats, so seat turnover would be calculated as follows: Seat turnover = Number of customers served ÷ Number of seats = 140 ÷ 75 = 1.87 turns

16. Sales Mix is a term used to describe the relative quantity sold of any menu item compared to other items in the same category. Sales Mix For the Sugar & Spice Restaurant August 20xx Menu Item Portion Sales Sales Mix Strip steak 12.5% 1000 Ginger shrimp 15.0% 1200 Lamb chop 22.5% 1800 Vege buritto 30.0% 2400 Chicken chop 20.0% 1600 Totals 100% 8,000

17. 17 Foodservice establishment calculate cost in dollars and compare those cost to sales in dollars. This enable them to discuss the relationship between cost and sales or the cost per dollar of sale. Cost ÷ Sales = Cost per dollar of sale decimal answer, and any decimal can be converted to a percentage if one multiplies it by 100 and adds a percent sign (%). Cost ÷ Sales x 100 = Cost% $ 312,090 ÷ $ 891,687 = .35 and .35 x 100 = 35.0 % Food cost ÷ Food sales x 100 =Food cost% Beverage cost ÷ Beverage sales x 100 = Beverage cost% Labor cost ÷ Total sales x 100 = Labor cost%

18. 18 The formula also can be use to determine the Sales price if the cost% is known. Cost ÷ cost% = Sales(or Sales Price) If the given cost percentage were 30.0 percent and the food cost for the item were $3.60, the appropriate sales price would be $12.00, illustrated here 30.0 % ÷ 100 = 0.3 $ 3.60 ÷ 0.3 = $12.00

19. 19 The formula also can be use to determine the cost if the spending power and cost% is known. Suppose this banquet manager is dealing with a group willing to spend $15.00 per person for a banquet, and the same given 30.0 percent cost percent is to apply. Calculation of the maximum permissible cost per person is facilitated by rearranging the formula once again: Sales x Cost % ( expressed as a decimal ) = Cost Sales X Cost % = Cost So the cost per person can be calculated as $4.50: 30.0 % ÷ 100 = 0.3 $ 15.00 X 0.3 = $ 4.50

20. 21 1. Given the following information, calculate cost percentages. Round your answers to the nearest tenth of a percent. a. Cost, $200.00; Sales, $500.00 b. Cost, $150.00; Sales, $500.00 c. Cost, $178.50; Sales, $700.00 d. Cost, $216.80; Sales, $800.00 2. Calculate cost, given the following figures for cost percent and sales: a. Cost percent, 28.0%; Sales, $500.00 b. Cost percent, 34.5%; Sales, $2,400.00 c. Cost percent, 24.8%; Sales, $225.00 d. Cost percent, 31.6%; Sales, $1,065.00 3. Calculate sales, given the following figures for cost percent and cost: a. Cost percent, 30.0%; Cost, $90.00 b. Cost percent, 25.0%; Cost, $500.00 c. Cost percent, 33.3%; Cost, $1,000.00 d. Cost percent, 27.3%; Cost, $1,300.40

21. 22 4. Sales records for a luncheon in the Zalika’s Restaurant for a recent week were: Given this information, calculate the sales mix. Item A, 196 Item B, 72 Item C, 142 Item D, 24 Item E, 112 Item F, 224 Item G, 162 5. Calculate the average check from the following data: a. Sales, $1,000.00; Number of customers, 125 b. Sales, $1,300.00; Number of customers, 158 c. Sales, $8,720.53; Number of customers, 976

22. 23 6. The following table indicates the number of covers served and the gross sales per server for one three - hour period in Asyikin’s Restaurant. Determine: (a) the average number of covers served per hour per server (b) the average sale per server for the three - hour period. Server Covers Served Gross Sales Per Server Fadhli 71 $237.40 Azuan 66 $263.95 Nadia 58 $188.25 7. Use the information about Asyikin’s Restaurant identified in Question 6 to complete the following: a. Calculate the average check. b. Calculate the turnover for the three - hour period if there are 65 seats in the restaurant.

Add a comment

Related pages

Grow Your Business - 2015 Articles, Insights and Guides

Grow your business with this collection of sales and marketing tips, ... 7 Steps Toward Better Small ... Best GPS Fleet Tracking Software and Systems 2015.
Read more

Answers to Warm-Up Exercises - Harvard University

E9-2. Cost of preferred stock ... Concept of cost of capital ... 11.84% (1 0.40) 7.10% P9-5. Cost of debt using the approximation formula
Read more

2015 - Salon.com

... Jan 7, 2015 5:59 PM UTC 0 Politics 2015, Race, Racism, Bias. GOP’s coming horror show: Why new Congress may be even worse than you think ...
Read more

World Indoor Rowing Championships | Concept2

World Indoor Rowing Championships; Indoor Rowers ... 2015, at the Agganis Arena in Boston. ... 6:16.7: 2: Matthew Bellesheim: Unaffiliated:
Read more


FASB Outlook The FASB Outlook is ... FASB Issues Accounting Standards Update 2015-16—Business Combinations (Topic 805): ... Concepts Statements;
Read more

Concept Boats, Inc.

Concept Boats. For unbeatable performance, style, and speed… choose Concept Boats. Concept Boats, headquartered in South Florida, is the premier builder ...
Read more

Mathematics Awareness Month 2015 :: Theme Essay

The theme of Mathematics Awareness Month 2015 is ... mathematical concepts, ... and unstructured data at low cost and derive relevant ...
Read more

Payroll Accounting | Explanation | AccountingCoach

Introduction to Payroll Accounting. ... payroll taxes and costs Social ... for the total bonus amount owed to the sales manager. On January 15, 2015 ...
Read more

News and Reviews - Autoblog - We Obsessively Cover the ...

Specs & Reviews Cars For Sale ... Automobiles. News and Reviews. ... Concept Cars; Humor; Motorsports; Podcasts; Read This; Recalls; Rumormill;
Read more

Holden Gallery - Car Images & Videos - Concept & Historic

Check out a range of Holden car pictures in our interactive gallery. ... concept & historical cars. ... 2015 Buick Avenir; 2015 Bolt;
Read more