Chapter 9
Daily Food Cost
Principles of Food, Beverage, and Labour Cost Controls,
Canadian Edition
Learning Objectives
• After reading this chapter, you should be able to:
• 9.1 Calculate food cost for a single day and for all the days to date in
a period.
• 9.2 Calculate food cost percent for any single day and for all the days
to date in a period.
• 9.3 Prepare a daily report of food sales, food cost, and food cost
percent.
• 9.4 Differentiate between book inventory and actual physical inventory
and identify various causes for differences between the two.
• 9.5 Determine book inventory value.
Introduction
• 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.
Important Definitions
• 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
Important Definitions
• Cost of food consumed: the actual dollar value
of all food used, or consumed, by the operation
• 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.
• It is important to note that ending inventory for
one accounting period becomes the beginning
inventory figure for the next period.
Determining Daily Food Cost
• All foods are either directs or stores
• Find total directs that day, available from the
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
Determining Daily Food Cost
• Determine the value of any alcoholic beverages
transferred from the bar to the kitchen
• 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
Determining Daily Food Cost
The daily cost of food can be determined in the following way:
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
Food Cost Today and To Date
• The daily food cost percent for any one day may
not be a very accurate:
• 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.
Food Cost Today and To Date
• Food cost percent to date is defined as the
cumulative food cost percent for a period.
• 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
Simple Daily Cumulative Cost Report
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%
Daily Reports
• Daily reports allow management to:
• accurately assess daily costs and sales
• compare with similar periods
• better assess operations and cost-control measures
• 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
Book vs. Actual Inventory
• Determine what the value of the closing
inventory should be, based on records
indicating purchases and issues
• Compare it with the actual inventory value
• Maintain daily food cost figures to establish the
value of the book inventory
Book vs. Actual Inventory
Book inventory value is determined as follows:
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
Book Inventory vs. Physical Inventory
• The value should be identical to the value at the end
of the month.
• Acceptable reasons are:
• 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
• allowing meats to age that they must be discarded
• theft of food.
Key Terms
• Book inventory, p. 255
• Daily cost of food, p. 246
• Food cost percent to date, p. 247
Chapter Web Links
• Silverware POS: www.silverwarepos.com
• Compeat: www.compeat.com
Copyright