ProStart Year 1 Chapter 12
Controlling Foodservice Costs
Ways to Express Revenue
► Total
Dollar sales
► Total Dollar sales by category (beverage, seafood,
steak, etc.)
► Sales Price
► Average dollar sales per customer, per server, and
per seat
► Quantity of items sold
► Average number of items sold
► Turnover
Cost Control consists of Four Basic
Steps:
► Create
standards and standard operating
procedures.
► Train all employees to follow procedures.
► Compare actual performance to standards.
► Correct any changes.
Forecasting Foodservice Revenue
► Factors




to Consider:
Number of seats
Estimated turnover
Estimated average check
Number of days in the year that the operation
will be open
The Average Cover Formula
Total revenue/Total customers= Average cover
Example:
A restaurant had $69,112 in revenue and a
total of 2,789 customers last month.
Answer
$69,112/2,789 = Average Cover
The Cost/Volume/Profit Relationship
(Fixed costs + 0)/(100% - Variable Cost
Percentage)=Break-even point
(Fixed costs + profit)/(100% - Variable Cost
Percentage)=Revenue Level
The Three Goals of Sales Control
Are:
► To
Sell Products
► To
Earn Revenue
► To
Make a profit
Customers Select Restaurants based
on:
► Location
► Cleanliness
► Menu
items
► Prices
► Décor
► Portion
Sizes
► Product Quality
► Service
Indicate the formula that can be
used to determine each sales item in
the left column below:
Average Sales
Per Customer
0.15xCheck subtotal
Standard Tip
Total Dollar sales/
total number of covers
Percentage of
Check total
Tip/Check subtotal
Answer
Average Sales
Per Customer
0.15xCheck subtotal
Standard Tip
Total Dollar sales/
total number of covers
Percentage of
Check total
Tip/Check subtotal
Balancing a Cash Drawer
The Formula:
Gross receipts (all recorded money received)
+ Change in drawer
- Cash Paid Out
Actual Receipts
A register reads $976.85 in gross receipts, contains
$19.05 in change, and has paid out $23.66. What
are the actual receipts?
Answer:
$976.85 + $19.05 - $23.66 = $972.24
Taking Inventory of Inventory
► Opening
Inventory- Items on hand, first day
of the month
► Closing inventory- Total dollar value of food
on hand, last day of the month
► Book inventory- Stores purchased + Closing
inventory for the preceding day – Stores
issue
► Average Inventory- (Opening inventory +
Closing inventory) / 2
Determining Monthly Food Cost
Opening inventory (items on hand, first day of
the month)
+ Purchases (directs and stores)
Total available for sale
- Closing inventory (items on hand, last day
of the month
Cost of food sold
Determining Daily Food Cost
Cost of directs (from the receiving clerk’s daily
report)
+ Cost of stores (from requisitions and meat tags)
+ Transfers from other departments or units to the
food department
- Transfers from the kitchen to other areas
Cost of food sold
- Cost employee meals
Daily food Cost
Determining Closing Book Inventory
Valuation
► Steps
involved:
 Begin with the closing inventory valuation for
the preceding day.
 Add any stores purchased.
 Subtract any stores issued.
Inventory Turnover Formulas
(Opening inventory + Closing inventory) / 2 =
Average inventory
Food cost for the month / Average food
inventory= Inventory Turnover
Causes of High Food Cost
► Improper
purchasing
► Inaccurate forecasting
► Poor receiving procedures
► Failure to follow standardized recipes
► Poor production schedules
► Lack of good selling and service
► Improper selection of menu items
Focus on Standard Portions
► Standard
Portion Size- The fixed quantity
served to a customer for a fixed selling
price.
► Standard Portion Cost- The dollar amount
that a standard portion should cost.
► Equation: Purchase price per unit / Number
of portions per unit = Standard portion cost