Food and Beverage Cost Control

Abstract

A food and beverage sale is the main element of hotel sales revenue. There must be pre-determined
goals for cost of food and beverages. In case of any unfavorable variance, an investigation should
practice because food and beverage has an adverse economic consequence. The purpose of this study
was to determine the types of cost control measures. This will establish whether the measures were
effective in maintaining the cost of sales within the acceptable limits. The objective of this study is to
achieve the determinants factors that increase the costs of food and beverage production and sales. T

Key words: Food and Beverage cost-control, Cost control measures.

Chapter 1

Chapter one objectives are: discus the foodservice revenue, profit and expenses. A professional
manager in foodservice must understand the essential knowledge between controlling the above areas
which results success in the operation. Additionally, this chapter discusses the mathematical concepts
to express the percentage of the operating results of the budget and revenue which meets the standard
within the hospitality industry.

Professional Foodservice Manager

With no doubt, a talented individual can form a successful foodservice manager. The roles of a
foodservice manager are both manufacturer and a retailer. A foodservice manager is a unique person in
hospitality. There are many functions which are conducted by foodservice manager including products
sales from item conceptualization to product delivery. Being an effective manager you must consider
whether the cost are high or low. Expenses in the industry must be incurred and must be properly
managed to allow the operation to achieve its desired profit. It is necessary for a business operator to
consider all expenses in the business including advertising, management salaries, the building housing
your operation and the labor plus all other expenses are subtracted before determining the profit
gained.

Profit-oriented formula for foodservice operator:

Revenue - Expenses = Profit

When managing the facility, you must receive revenue, the money spent in and the expenses incurred to
operate the business. The remaining money represents the profit gained.

The results for a profitable business are solid planning of the business, careful decision making and
sound management. You must be careful to earn profit. Profit is not considered as the money left after
the bills are paid. It is noted that not all restaurants make profit but some do. The formula below
identifies and rewards the owner of the business the risks linked to the business ownership or
investment:
Revenue - Desired Profit = Ideal Expense

Expenses

In foodservice there are expenses which are learnt to be controlled. Including:

 Food costs
 Beverage costs
 Labor costs
 Other expenses

Percent Review

By understanding the percent’s and how they are mathematically applied is very important. There are
three ways to represent a percent as follows:

 Common form
 Fraction form
 Decimal form

Formulas for Using Percent

Expenses
=Expenses %
Revenue

Profit
Profit %
Revenue

Desired Profit
=Desired Profit %
Revenue

Revenue−( Food∧Beverage Cost +Other expenses)=Profit