Chapter 9
Daily Food Cost
Principles of Food, Beverage, and Labour Cost Controls,
Second Canadian Edition
Learning Objectives
• 9.1 Calculate food cost and food cost percent for a single day
and for all the days to date in a period.
• 9.2 Prepare a daily report of food sales, food cost, and food
cost percent.
• 9.3 Differentiate between book inventory and actual physical
inventory and identify various causes for differences between
the two.
• 9.4 Determine book inventory value.
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
• 9.1a Calculate food cost percent for any single day and for all the
days to date in a period.
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• If foodservice operations were monitored from
monthly cost figures alone, the length of time
between monthly reports would present an
obstacle.
• This delay can be very costly. To avoid the
delay, better organized foodservice operations
calculate food cost daily.
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
Introduction
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• Opening inventory: the dollar value of all food
on hand at the beginning of the accounting
period
• Purchases: the sum cost of all food purchased
during the accounting period
• Total Available: the sum of the beginning
inventory and purchases
• Closing Inventory: the dollar value of all food
on hand at the end of the accounting period
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
Important Definitions
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Important Definitions
• Employee meal cost: a labour-related, not
food-related cost. Free or reduced-cost
employee meals are a benefit much in the same
manner as medical insurance or paid vacation.
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
• Cost of food consumed: the actual dollar value
of all food used, or consumed, by the operation
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Determining Daily Food Cost
• All foods are either directs or stores
Receiving Clerk's Daily Report
• Stores are charged to the food cost when issued
• Determine the value of stores issued on a given day
• Extends all requisitions for foods issued on that day
and total
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
• Find total directs that day, available from the
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Determining Daily Food Cost
• Determine the value of any alcoholic beverages
• Determine the value for daily transfers from the
kitchen to bar, promotion, etc.
• Many establishments credit daily food cost for
the value of employees’ meals
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
transferred from the bar to the kitchen
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Determining Daily Food Cost
Cost of directs (from the Receiving Clerk’s Daily Report)
+ Cost of stores issued
+ Adjustments that increase daily cost*
– Adjustments that decrease daily cost**
= Cost of food consumed
– Cost of employee meals
= Daily cost of food sold
*Include transfers from bar to kitchen; transfers from other units
**Include transfers from the kitchen to the bar food to bar (directs), gratis to
bar, steward sales, promotion expense
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
The daily cost of food can be determined in the following way:
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Food Cost Today and To Date
• The daily food cost percent for any one day may
• Directs may be purchased every other day
• this will make daily food cost artificially higher on
the days when directs are received
• To help overcome the problem most operations
calculate food cost percent to date.
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
not be a very accurate:
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Food Cost Today and To Date
• Food cost percent to date is defined as the
• It takes into account all food costs and all food
sales for all days so far in the period.
• To determine food cost percent to date:
• divide cost to date by sales to date
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
cumulative food cost percent for a period.
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Simple Daily Cumulative Cost Report
Adjustments
Total Cost
Total Sales
Food Cost %
Date Directs
1-Feb $254.20
Stores
$ 977.30
Added
to Cost
$ 57.20
Subtract
from Cost
Today
$255.30 $1,033.40
2-Feb $326.70
$ 944.10
$ 86.20
$253.40
3-Feb $262.50 $1,040.40
$ 88.60
4-Feb $256.35
$ 965.30
5-Feb $218.75
$ 944.55
To Date
$1,033.40
Today
$2,778.00
To Date
$ 2,778.00
Today
37.199%
To Date
37.199%
$1,103.60
$2,137.00
$2,919.20
$ 5,697.20
37.805%
37.510%
$177.80
$1,213.70
$3,350.70
$3,056.95
$ 8,754.15
39.703%
38.276%
$ 120.00
$220.00
$1,121.65
$4,472.35
$3,094.20
$11,848.35
36.250%
37.747%
$ 90.00
$170.00
$1,083.30
$5,555.65
$3,427.35
$15,275.70
31.608%
36.369%
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
Simple Daily Cumulative Cost Report
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Daily Reports
• Daily reports allow management to:
• Report should show:
•
•
food cost, food sales, and food cost percent for any
one specific day and for all the days to date in the
period
compare these figures to those for a similar period
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
• accurately assess daily costs and sales
• compare with similar periods
• better assess operations and cost-control measures
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Book vs. Actual Inventory
• Compare it with the actual inventory value
• Maintain daily food cost figures to establish the
value of the book inventory
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
• Determine what the value of the closing
inventory should be, based on records
indicating purchases and issues
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Book vs. Actual Inventory
Opening inventory (closing inventory for the preceding month)
+ Purchases (total stores purchases for the period, on receiving reports)
= Total available (total value of stores available for use during the period)
– Issues
(total stores issues for the period, as listed on requisitions)
= Closing book value of the stores inventory
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
Book inventory value is determined as follows:
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Book Inventory vs. Physical Inventory
• an occasional human error in costing out requisitions
• use of the most recent purchase price rather than actual
purchase price in valuing the physical inventory
• mismarking of actual purchase prices when that method is
used
• Reasons that are never acceptable include:
• issuing stores without requisitions
• food spoilage that must be discarded
• theft of food.
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
• The value should be identical to the value at the end
of the month.
• Acceptable reasons are:
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Key Terms
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
• Book inventory, p. 252
• Daily cost of food, p. 244
• Food cost percent to date, p. 245
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Chapter Web Links
• Silverware POS: www.silverwarepos.com
Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
• Compeat: www.compeat.com
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Principles of Food, Beverage, and
Labour Cost Controls, Second
Canadian Edition
Copyright
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